Author: Mr. Amar – Technical Analyst

Gold was up this morning during the Asia session, heading towards a three-month peak hit during the previous session. Fears that Russia will invade Ukraine continue to mount and investors pull back from riskier assets. US officials warned that Putin’s forces could launch an invasion as soon as Wednesday, citing mostly unspecified intelligence. US satellite images are reported to show military units moving from assembly areas into possible attack positions. Meanwhile, diplomatic efforts to avoid a conflict remain underway.

XAU/USD is attempting to clear the November high of $1877 as bulls pile on the buy button. The move follows a break above trendline resistance stemming from the September 2020 swing high. A clean break above $1877 would bring the $1900 psychological level into focus. Next up, if bulls succeed, is the June 2021 high at $1917. Alternatively, failing to hold prices above the November high may see prices pull back, perhaps to the January high at $1854. A deeper retracement would put former trendline resistance on the cards.

While portraying the mood, the US Treasury yields pare the previous day’s gains whereas the stock futures and Asia-Pacific equities trade mixed of late. Moving on, US Producer Price Index (PPI) for January and Empire State Manufacturing Index for February will decorate the calendar but major attention will be given to the risk catalysts mentioned above for clear direction. The markets are on high alert as the tensions surrounding the Russian military buildup on the border of Ukraine is raising the probabilities of an imminent attack.