Gold Price Forecast: XAU/USD stuck in a $14 range, as bulls prepare for an assault of $1900

Gold targets a gain of 2.06% on the week courtesy geopoliticaljitters and Fed speaking unheard by market players.

Gold Price Forecast: XAU/USD stuck in a $14 range, as bulls prepare for an assault of $1900
  • There are signs that the conflict in Eastern Europe is not under control. Russian President Putin took charge of nuclear drills this weekend.

  • XAU/USD Tech Outlook: Despite starting the week off badly, still upwardly biased as XAU bulls prepare for $1900.

As the New York session winds down, gold (XAU/USD), slides and fails to hold onto the $1,900 mark. This is up 2.02% so far this week. XAU/USD trades at $1,897 as of the writing. The safe-haven gold bid was supported by a risk-off market mood throughout the week. There were four days of gains and one in the red.

Russia/Ukraine Update

The Russia Ukraine story continues to dominate the news. Tensions have not changed in the last few hours. According to Ukrainian intelligence, Russian special forces had placed many explosive devices around infrastructure in Donetsk's separatist-held territory. Zyuganov, a Russian Communist leader, stated that Vladimir Putin would make a decision regarding Donbass on February 20.

A Senior US administration official stated that Russian President Putin's decision on Saturday to supervise nuclear drills was "HT0_ escalatory ." However, other US officials privately advised President Zelensky of Ukraine to remain put as fears about an incursion are increasing.

What happened to gold, however? The yellow metal was consolidated in the $1,886-1,900 range during Friday's session. There were also statements in news media between Russia and Ukraine. This kept uncertainty about the current situation in Ukraine.

In the bond market, the US 10-year Treasury yield has fallen five basis points to 1.925%. The US Dollar Index which measures the greenback's price against a basket of rivals, edged up 0.3% to 96.10 due to increased demand for it amid geopolitical worries.

XAU/USD Forecast: Technical outlook

The non-yielding metal crossed the $1,900 threshold for the first time since June. XAU bulls failed to post a daily close, leaving the yellow metal vulnerable to a mean reversion movement.

Friday's XAU/USD consolidation was in a $14.00 range. If gold closes within this range, a move towards the February 15th daily high and resistance/support at $1.879 are possible. XAU bulls are preparing for an assault on $1,900. If this scenario is realized, the XAU/USD resistance at $1,900 will be breached. It is breached and will open the door to $1,916, which once cleared will lead to January 2021 highs of $1,959.


 

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