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Gold Price retreats from a fresh multi-month high and filled the weekly opening gap. As the US braces for Russian oil import ban even without allies, UK Defense Chief hints at further violence in Kyiv.
Gold price bounced from an intraday low of $1,960.95, quickly recovering roughly $15 per troy ounce ahead of the US opening, and trimming early gains.
The slump was triggered by news related to yet another round of talks between Moscow and Kyiv, this time in Turkey and scheduled for next Thursday. Extreme overbought conditions and profit-taking after the Gold Price hit $2,002.64 a troy ounce added to the recent intraday slump, which anyway does not affect the dominant bullish trend.
Gold Price has been on the run ever since Russia began invading neighbour Ukraine, a couple of weeks ago, which resulted in soaring demand for safe-haven assets. XAUUSD soared throughout the first half of the day, but demand receded heading into the US opening, as stocks’ performance improved.
European indexes have trimmed most of their intraday losses, while Wall street kick-started the day with major indexes posting modest losses.
Given the recent strong bullish run, slightly overbought conditions on short-term charts prompted traders to take some profit off their bullish positioning around Gold Price.
Apart from this, a blowout US dollar rally was seen as another factor that acted as a headwind for the dollar-denominated commodity. That said, the downside remains cushioned amid worries about the potential economic fallout from a further escalation of the Russia-Ukraine war.
The fundamental backdrop remains tilted firmly in favour of bullish traders and supports prospects for further gains. Hence, any meaningful pullback might still be seen as a buying opportunity for XAUUSD and is more likely to remain limited amid absent relevant market moving economic releases.
In the second round of peace talks last week, representatives from Kyiv and Moscow agreed on the creation of safe corridors, to evacuate civilians from some cities under attack.
The precious metal refreshed multi-day high earlier in Asia as risk-off escalated on the weekend news suggesting Russia’s intensified military invasion of Ukraine.
On the same line were comments from the West suggesting an oil import ban from Russia. Further, UK Defense Chief Admiral Sir Tony Radakin also signaled further casualties in Kyiv as he believed, per The Times, “Russia could ‘turn up the violence’ with ‘more indiscriminate killing and more indiscriminate violence’ in response to resistance”.
Earlier on the day, Bloomberg said that the US weighs acting without allies on the ban of Russian oil imports.
While portraying the risk-off mood, S&P 500 Futures drop 1.30% whereas the US 10-year Treasury yields fall 2.5 basis points (bps) to 1.69% to portray the heavy risk-off mood.
It is worth noting that Russia’s stand as the world’s third-biggest oil producer adds to the global supply crunch and strengthens commodities additionally.
