GOLD (XAU/USD)
Gold extends rally, closes in on $1,900 amid risk aversion
Gold continues to push higher toward $1,900 on Thursday as investors grow increasingly concerned about a military conflict between Russia and Ukraine. The US Envoy to the UN said on Thursday that evidence on the ground suggests that Russia is moving towards an "imminent invasion" of Ukraine.
From a technical perspective, the emergence of dip-buying on Wednesday and the subsequent strong move up favour bullish trades. That said, RSI (14) on the daily chart has moved on the verge of breaking into the overbought territory and warrants some caution before positioning for any further appreciating move. Hence, momentum beyond the $1,900 mark is more likely to confront stiff resistance and remain capped near the $1,908-$1,910 region. This should act as a key pivotal point, which if cleared will set the stage for an extension of the upward trajectory.
On the flip side, the $1,879-$1,877 region now seems to protect the immediate downside ahead of the $1,870-$1,868 support zone. Any further decline would still be seen as a buying opportunity near an eight-month-old descending trend-line resistance breakpoint, around the $1,856-$1,855 zone. The latter should act as a strong base for gold, which if broken decisively might prompt some long-unwinding trade. The XAU/USD could then accelerate the corrective slide towards testing the next relevant support near the $1,832-$1,830 region
Gold continues to push higher toward $1,900 on Thursday as investors grow increasingly concerned about a military conflict between Russia and Ukraine. The US Envoy to the UN said on Thursday that evidence on the ground suggests that Russia is moving towards an "imminent invasion" of Ukraine.
From a technical perspective, the emergence of dip-buying on Wednesday and the subsequent strong move up favour bullish trades. That said, RSI (14) on the daily chart has moved on the verge of breaking into the overbought territory and warrants some caution before positioning for any further appreciating move. Hence, momentum beyond the $1,900 mark is more likely to confront stiff resistance and remain capped near the $1,908-$1,910 region. This should act as a key pivotal point, which if cleared will set the stage for an extension of the upward trajectory.
On the flip side, the $1,879-$1,877 region now seems to protect the immediate downside ahead of the $1,870-$1,868 support zone. Any further decline would still be seen as a buying opportunity near an eight-month-old descending trend-line resistance breakpoint, around the $1,856-$1,855 zone. The latter should act as a strong base for gold, which if broken decisively might prompt some long-unwinding trade. The XAU/USD could then accelerate the corrective slide towards testing the next relevant support near the $1,832-$1,830 region
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