Gold Approaches $2000 Before Looming Wall Street’s Close

Gold overnight hit a YTD high at $2002.67, but afterwards, retreated to January’s 2021 resistance level-turned-support around $1959.40. Just now, the XAU/USD Index is trading at $1996.21, reflecting the risk-aversion of the financial markets.

The conflict between Russia-Ukraine has not eased amid the third round of ceasefire talks. Sanctions on Russia will escalate again.

Late in the North American session, news reports said that the Biden administration is willing to move ahead with a ban on Russian oil imports unto the US. Meanwhile, European US allies would not participate in that sanction due to their dependence on Russian crude.

Global equity markets extend losses at the beginning of the week, illustrating investors’ risk aversion. In the bond market, US Treasury yields have risen as of late, with the 10-year benchmark note up to three basis points, sitting at 1.751%, though failing to weigh on the non-yielding metal.

Real yields as of Friday reached -1%, a level last reached in July 2020, which usually weighs on the precious metal, though it appeared to be ignored by market participants during the day.

No economic data was released during the US trading session. This left the precious metal traders adrift to market sentiment. Late in the week, the US economic docket would feature JOLTs Job Openings on Wednesday, followed by US inflation figures on Thursday, and by Friday, the Preelimnary reading of the University of Michigan Consumer Sentiment.

Technically, gold is upward biased, as daily moving averages (DMAs) are well-positioned below the spot price, in a bullish orderly way and trending up. Furthermore, Monday’s price action points to a close near the daily high around $2000, meaning that XAU/USD could consolidate around the $1950-$2000 range in the near term.

If XAU/USD closes above $2000, the first resistance would be Monday’s high at $2002.67, followed by $2050, and by the all-time-high around $2075.28. Otherwise, the XAU/USD first support would be February 24 daily high resistance-turned-support at $1974.48, followed by 6 January, 2021, resistance-turned-support at $1959.40, and then 12 October, 2020, daily high, turned support at $1933.29.