For bullion traders, Monday tends to be a noble trading session. Prices of XAUUSD meet up their highest next levels which provides a safety closet to bullion traders.
XAUUSD
It seems like an uncertainty between Russia and Ukraine conflict damps down the risk sentiments thereby encouraging the investors to dive into the billions. Ukraine authorities said that Russian forces had saved their bombardments thereby claiming nearly full control of the southern port of Mariupol.
Ukraine and Russia is the prominent reason for getting the prices high. The reason behind this fact is everything is interlinked.
Let’s connect the dots and understand the reason for this price hike.
There were invasions between Russia and Ukraine which may worsen our economic condition. The USA wants Russia to be boycotted in terms of trade. Moreover, put certain sanctions. But, we are well aware of the fact that Russia is the largest producer of Crude oil and Natural gas.
During past days, we saw an upside rally in both crude oil and natural gas prices. If the situation continues for so long then sooner or later may adversely impact the purchasing power of a common man.
Furthermore, panic in the global market continues which thereby weakens the Asian currencies. Now, in this scenario, only gold is a safe haven commodity that may boost the economy thereby decreasing the inflation rate.
Consequently, during the times of economic and political crisis bullion tends to be the strongest sector that comes with value and profits.
Moving further, if we look into China’s economy then it slowed down in the month of March thereby hitting the consumption, real-estate, and export sector. During the first quarter, China is not expecting such a downfall amid the Covid-19 curbs & Ukraine crisis.
Technical interpretation
In weekly charts, XAUUSD is forming an inverted head and shoulder pattern thereby indicating an upward trend. We are not expecting Gold to breach the support level of $1600 till any further news arises from global economies.
As a result, the latest stiffness between Russia and Ukraine tends to give fuel to the price actions of XAUUSD.
Moreover, below is another chart which is clearly indicating strength in Gold prices. It is a monthly chart where Oscillator RSI and MACD crossover is showing positive upward movement. Consequently, MACD crossover is supporting a fresh breakout.
Investors or traders who are sitting on its buying side are about to shine just like gold. Head and shoulder pattern has a difference of 900 points approx. and breakout point is $2075 and currently trading around $1990. A decisive close above 2010 will take XAUUSD to $2025—$2040 and then to $2075. More and more upside rallies we expect on a weekly close above 2075 levels only. So it’s an opportunity to buy and accumulate Gold in panic as an investment or as a hedging tool against your portfolio.