Gold, US Dollar (USD) Talking Points:
- Gold prices linger despite escalating tensions between Ukraine & Russia
- Interest rate expectations and an aggressive Fed may impede further Bullion gains
- XAU/USD awaits the release of the highly anticipated US CPI print
Russia-Ukraine tensions intensify, Gold holds steady
Gold prices are currently trading with listless momentum despite intensifying tensions between Russia and the Ukraine and escalating fears of an invasion.
Although increasing geopolitical risks have recently underpinned Bullion prices, the increasing probability of higher rates and rising yields have limited further gains, forcing bulls into a wall of resistance, formed by key Fibonacci levels of historical moves.
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As employment and inflation remain the two core metrics for the Federal Reserve, the release of a surprisingly optimistic NFP report on Friday now places US inflation data at the forefront of risk sentiment, posing as an additional catalyst for Gold prices.
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Gold Price Analysis
As Gold prices aim for their second consecutive week of gains, key Fibonacci levels from both the 2020 and 2021 moves continue to provide both support and resistance for the yellow metal.
With bulls now attempting to break through the 50% retracement of the 2021 move at $1,818, the next hurdle resides at the next key Fib level of $1,833 which then leaves the door open for a move towards $1,852.
Gold (XAU/USD) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
Meanwhile on the daily time-frame, the potential formation of a doji candle is a potential indication that bulls may be losing steam as they struggle to gain traction.
While the CCI (commodity channel index) remains within normal range, an increase in selling pressure and a shift towards riskier assets could see prices falling back towards the key psychological level of $1,800 which could allow for a continuation of the bearish trend that has persisted since the August 2020 high.
Gold (XAU/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
Gold (XAU/USD) Sentiment
Gold: Retail trader data shows 74.66% of traders are net-long with the ratio of traders long to short at 2.95 to 1. The number of traders net-long is 5.56% lower than yesterday and 15.39% lower from last week, while the number of traders net-short is 25.62% higher than yesterday and 47.16% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.
Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.
| Change in | Longs | Shorts | OI |
| Daily | -1% | 3% | 1% |
| Weekly | 14% | -3% | 6% |
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
