Tuesday (February 21) morning session, yellowgold pricePrices rose slightly, up 0.09%, and are currently trading around $1,837. Gold prices currently hit a high of $1,838.42 an ounce and a minimum of $1,832.22 an ounce. U.S. Treasury yields rose, and these external market factors were not conducive to precious metals market bulls.
In the U.S. market, spot gold once fell by about $10 to $1833.99 an ounce, then rebounded from a low to a high of $1843.84 an ounce, then fell back from a high and is now trading at $1834 an ounce.
Global stock markets were broadly lower overnight, with U.S. stock indexes falling sharply. Risk aversion among traders and investors rose at the start of the U.S. trading week as U.S. President Joe Biden made a surprise visit to Ukraine and pledged an additional $500 million in aid to the war-torn country. Meanwhile, international relations continued to deteriorate.
Clearly, precious metals traders are more worried about the outlook for consumer and business demand for the metal, as the growing standoff between the world’s two economies more than offsets the geopolitical impact on gold andsilverAn underlying bullish safe-haven demand outlook.
Major outside markets saw the U.S. dollar index higher.New York Mercantile ExchangecrudeFutures prices were slightly weaker, trading around $76.25 a barrel. The benchmark U.S. 10-year Treasury yield is currently at 3.916%.
Subsequent support for spot gold is $1,810 an ounce, followed by $1,780. Given that gold is beginning to appear oversold, we believe that exposure to gold can be gradually increased (especially for those investors with low exposure). Additionally, demand from central banks remains strong, which we expect to continue supporting gold prices. In our view, the rebound in real yields and the dollar is likely to level off, headwinds against gold are fading, and gold can also act as a hedge against short-term volatility due to geopolitical tensions.
Gold: Waiting around $1,850
Gold prices managed to print a bullish candle last week, which could signal a bullish reversal. However, with its subsequent close below $1850, gold may consolidate around this level. If the price can move back above $1,850 and close above this level, the uptrend could continue. On the other hand, if the price continues to bear down, then $1780-1800 will be the target area to watch.
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