Gold continued trading in an uptrend on Tuesday, above its $1,829 per ounce resistance level, supported by rising geopolitical tensions and market volatility. Gold price reached a two-month high of $1,853 per ounce as investors sought safe-haven assets. The past couple of days there was increased market turmoil, with global stock markets exhibiting wild swings. As many assets became increasingly unstable, traders turned to gold for safety. Retreating yields in the US also boosted the price of gold, which loses appeal as an investment when interest-bearing assets, such as treasury yields, rise.
In addition, the mounting crisis between Russia and Ukraine has turned investors towards less risk-sensitive assets, boosting the price of gold. Potential economic and trade consequences against Russia might also serve to drive the price of other commodities up, contributing to rising inflation rates and benefiting gold, which is often used as an inflation hedge.
If the price of gold continues to climb, it may find resistance at $1,877 per ounce, while if the price of gold decreases, the $1,800 level may provide support, while further down, support may be found at 1,782 per ounce. This week, gold price is expected to show some volatility, due to the mounting tensions between Russia and Ukraine. Also expected to affect the price of gold is the outcome of the FOMC meeting on Wednesday.
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Written by:
Myrsini Giannouli
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