Gold consolidates the biggest weekly fall since June 2021 as Russia-Ukraine tussles escalate in Mariupol.
PBOC inaction, chatters over Evergrande and Saudi Arabia adds to the risk-off mood.
Japans off restricts market moves in Asia, speech from Powell, Biden eyed for fresh impulse.
Gold Weekly Forecast: Technicals turn bearish after weekly decline
In addition to Kyiv‘s readiness to battle in Mariupol, escalated shelling in Ukraine by Russian forces also portrays the grim conditions. Recently, the Chinese Envoy showed readiness to de-escalate the war in Ukraine but markets have their doubts as the last week’s call between US President Joe Biden and his Chinese counterpart Xi Jinping refrained from conveying any major details on the key issue. On the contrary, discussion over Taiwan added to the Sino-American jitters and helped renew golds safe-haven demand.
Elsewhere, the increasing covid numbers in China and a suspension of trading in Hong Kong by the troubled real estate firmer Evergrande also weigh on the market sentiment.
It‘s worth noting that the People’s Bank of China (PBOC) matched wide market expectations to keep the benchmark interest rates unchanged. As per the latest policy move, the one-year Loan Prime Rate (LPR) was kept at 3.7% while the five-year counterpart remained unchanged at 4.6%.
Against this backdrop, the S&P 500 Futures drops 0.28% intraday whereas the Asia-Pacific shares trade mixed amid a holiday in Japan and a light calendar elsewhere.
Looking forward, US President Joe Biden will have a call with the leaders of France, Germany, Italy and the UK. Given the latest escalation on the Ukraine-Russia issue, the politicians may exert more pressure on Moscow, which in turn could add to the XAU/USD strength. Also likely to direct the gold prices for the day is a speech from Fed Chair Jerome Powell. Should Powell keep expecting a downside risk to inflation in the future, the US dollar weakness may add to the metals latest upside moves.
Technical analysis
Gold (XAU/USD) prices cross the 50% Fibonacci retracement (Fibo.) of January-March upside amid steady RSI and lackluster MACD signals of late.
Given the quote‘s latest sidelined performance between the 100 and 200 SMA, respectively around $1,952 and $1,905, the metal’s latest run-up aims at the upper limit of the stated range i.e. near $1,952.
However, a horizontal area from late February will challenge the XAU/USDs further upside around $1,977-80.
On the contrary, a downside break of the 200-SMA level surrounding $1,905 will need validation from the $1,900 threshold.
Also challenging the gold sellers is the 61.8% Fibo. level near $1,890 and February 24s swing low surrounding $1,879.
Gold: Four-hour chart
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