XAU/USD. Intraday. Russia + Ukraine Buys. RR 4:1 !!
We are approaching Wednesday when Russia intend to invade Ukraine, this fundamental news has been priced into the market.
We should trade the news headlines and expect large volume in gold tomorrow.
Currently gold has seen exhaustion as market participants priced in the likelihood of Russia invading, this has since eased notably last night after diplomats stated they weren't looking for a war, just more talks about slavic countries not joining NATO. This is why gold blew off steam as dimplomatic talks brought optimism to the market. What does Putin have planned? Well we should be aware of both situations.
Russia invades: Expect dollar strength, which will out downwards pressure on gold, however Fear, Uncertainty, and Doubt will more than cause gold to overreact and large inflows into gold causing some sort of bounce off of the 1837-1841 zone. This zone also happens to overlap the 0.618 - 0.7 fibonacci retracement area which is the golden area to enter more buys from the pullback of the initial gold rally seen on Friday last week.
If Russia do not invade then we could expect gold to melt as shown on the chart and you should look for sells once 1836 breaks and ride them down to the low 1800s range
Note that increased FED rate hikes are priced in, the next being March 16th, Fed hikes are bearish for gold. Only if inflation sentiment continues and the FED are seen not to be able to combat this, should you expect bullish sentiment.
I'll keep this chart updated as things play out tomorrow.
We should trade the news headlines and expect large volume in gold tomorrow.
Currently gold has seen exhaustion as market participants priced in the likelihood of Russia invading, this has since eased notably last night after diplomats stated they weren't looking for a war, just more talks about slavic countries not joining NATO. This is why gold blew off steam as dimplomatic talks brought optimism to the market. What does Putin have planned? Well we should be aware of both situations.
Russia invades: Expect dollar strength, which will out downwards pressure on gold, however Fear, Uncertainty, and Doubt will more than cause gold to overreact and large inflows into gold causing some sort of bounce off of the 1837-1841 zone. This zone also happens to overlap the 0.618 - 0.7 fibonacci retracement area which is the golden area to enter more buys from the pullback of the initial gold rally seen on Friday last week.
If Russia do not invade then we could expect gold to melt as shown on the chart and you should look for sells once 1836 breaks and ride them down to the low 1800s range
Note that increased FED rate hikes are priced in, the next being March 16th, Fed hikes are bearish for gold. Only if inflation sentiment continues and the FED are seen not to be able to combat this, should you expect bullish sentiment.
I'll keep this chart updated as things play out tomorrow.