Modest recovery in the risk sentiment prompted some profit-taking around gold on Wednesday.The worsening situation in Ukraine, stagflation fears should limit any meaningful corrective slide.Softer USD/US bond yields should further lend some support to the dollar-denominated metal.Gold edged lower through the early European session on Wednesday and was last seen hovering near the lower boundary of its intraday trading range, just below the $2,040 level. A goodish recovery in the equity markets turned out to be a key factor that prompted some profit-taking around the safe-haven XAU/USD. The risk sentiment stabilized a bit amid hopes for a positive outcome from the meeting between Russian and Ukrainian foreign ministers in Turkey on Thursday. The optimism, however, is likely to remain capped amid the risk of a further escalation in the tensions between Russian and Western powers.
Apart from this, modest US dollar weakness and softer US Treasury bond yields could also lend some support to the dollar-denominated gold. Hence, it will be prudent to wait for strong follow-through selling before confirming that the XAU/USD has topped out and positioning for any meaningful corrective pullback. Nevertheless, the metal, for now, seems to Hihave snapped four successive days of the winning streak to the highest level since August 2020 and remains at the mercy of developments surrounding the Russia-Ukraine saga.
From a technical perspective, RSI (14) on short-term charts pointed to extremely overbought conditions and seemed to be the only factor that prompted some profit-taking. Any subsequent decline, however, is likely to find decent support near the $2,021 region. This is followed by the key $2,000 psychological mark, which should now act as a near-term base for gold. A convincing break below might prompt aggressive long-unwinding trade and drag spot prices towards the next relevant support near the $1.980 area.
On the flip side, the overnight peak, near the $2,070 zone now seems to act as an immediate resistance ahead of the August 2020 swing high, around the $2,075 region. Some follow-through buying would mark an uncharted territory and set the stage for a further near-term appreciating move for gold. Bulls might then aim to conquer the $2,100 round-figure mark.
EUR/USD floats above 1.0900 as bulls and bears jostle over Ukraine crisis, inflation fears.EUR/USD fades the previous day’s rebound from 22-month low, sidelined of late. Softer yields, cautious optimism weigh on DXY as markets await Thursday’s Russia-Ukraine peace talks in Turkey. Fears of more economic hardships for the bloc, higher inflation keep EUR bears hopeful.
GBP/USD dribbles inside weekly range around 1.3100.GBP/USD bears take a breather around 1.3120 as the quote snaps a three-day downtrend heading into Wednesday’s London open. However, an immediate rectangle formation joins sluggish Momentum to restrict the quote’s further upside around 1.3145.
GBP/USD News .Gold bulls have the upper hand amid Ukraine crisis, stagflation fears.The worsening situation in Ukraine, stagflation fears should limit any meaningful corrective slide. Softer USD/US bond yields should further lend some support to the dollar-denominated metal.