Author – Mr.Amar – Technical Analyst

Gold rose during Asia Tuesday morning as US Treasury yields hit multi-year highs. Federal Reserve Chair Jerome Powell took a tougher stance on inflation, while the ongoing conflict in Ukraine also buoyed the port. There are no fresh inputs today to move the price significantly in Asia, leaving gold caught between higher US yields and rising risk aversion. Market sentiment improved with Russia’s second coupon payment, a source noted to Reuters, and Ukrainian President Volodymyr Zelenskyy’s willingness to discuss Ukraine’s commitment not to seek NATO membership.

The strength is largely attributed to the sharp rise in crude oil prices, which boosted inflation expectations. The increase came amid growing calls from EU members to ban Russian energy exports. The move would see the 27-strong bloc join the United States and the United Kingdom in banning Russian energy products. Alternatively, the yellow metal’s upside could be capped by Federal Reserve speculation. Prices would probably have risen further today were it not for Fed Chair Jerome Powell’s aggressive comments. Powell stated that the central bank stands ready to raise more than 25-basis points if necessary. The possibility of a 50-basis point hike at the May FOMC meeting surfaced in the comments.

Gold price holds the 50% Fibonacci retracement bounce from September 2021 to March 2022. However, around $1945 limits the yellow metal’s short-term rises ahead of the previous support line from early February, nearby the price of $1990. Alternatively, pullback moves could retest the 50% Fibonacci level around $1895 as it was highlighted as the key short-term support zone in November 2021. In short, gold prices remain undecided between the $1877 and $1990 trading range.