US Bliken’s Remarks Impact gold market sentiment

Gold: US Bliken’s Remarks Impact market sentiment

Gold prices were trapped in a range as sellers emerge to sell the news on Russia. Fed is moving back into focus as the Russian risk premium starts to decay. Traders watching for further deployment of Russian troops in expanded borders of Donetsk and Luhansk.

Gold was backing off as risk appetite returns to markets following US president Joe Biden’s speech and announcement of sanctions that have been added to measured equivalents from other Western nations over Russia.

The markets were cheering the prospects of diplomacy as there has been no further evidence that Russia has indeed infiltrated deeper into Ukraine territory.

However, the US continues to warn that the US will escalate its sanctions if Russia escalates its aggression to Ukraine. In fact, at the turn of the roll-over hour in currencies.

The US Secretary of State Antony John Blinken announced that it doesn’t make sense for him to meet with Russia’s Lavrov anymore. He says he sent a letter today to him informing him of that.

The breakdown of diplomacy is a risk ahead for Asian markets and bullish for gold. The price of gold, XAU/USD, has been stuck in a sideways range this week so far, bouncing around between $1,914 and $1,886 as traders juggle the chorus of headlines surrounding the Ukraine crisis. At $1,905, gold is trading near flat on the day so far.

Traders have been whipsawed in financial markets due to the developments in Ukraine a day after Russian President Vladimir Putin recognized two breakaway regions in the country and ordered troops to the area. Putin said the troops would be “peacekeeping” in the breakaway regions – a claim dismissed by the United States as “nonsense”.

In the face of a slew of sanctions imposed by Western powers, such as the UK, US and EU, the Kremlin said it remained open to diplomacy but, so far, there has been no confirmation of any summit between Russia and the aforementioned nations.

The White House said Sunday a summit between the US and Russia will go ahead only “if an invasion hasn’t happened.”

Talks between Secretary of State Antony Blinken and Russian counterpart Sergey Lavrov in Europe this week are the main focus. This meeting, however, also depends on the condition that Moscow’s troops don’t further encroach into Ukraine. This condition might have already been severed as there are concerns that Russia now recognizes the expanded borders of Donetsk and Luhansk.

The dry explanation has explosive consequences: Russia could use the territorial claims as a cause to launch an invasion of more Ukrainian territory, saying it was defending the interests of its proxy states in Donetsk and Luhansk.

All the difficult questions will be solved during negotiations between the current Kyiv government and the leadership of this government. But Kyiv has always resisted negotiating directly with the governments of the Russian-controlled territories, saying it wants to speak with Moscow directly.

Nearing a geopolitical climax, gold bugs are selling the news on Russia. Gold prices have struggled to firm north of $1900/oz despite the significant escalation in the Ukraine crisis. After all, gold prices have rallied significantly ahead of the escalation in response to the associated geopolitical risk premium, leaving traders to sell-the-news on the event.

The analysts also explained that the rise in Russin risk premium catalyzed a breakout from gold’s wedge pattern, bringing in some chartist demand and sparking a substantial CTA buying program.