Gold Price poised for a bullish breakout of record highs

• Easing tensions favor a better market mood, although Gold Price rallies anyway.
• Wall Street is posting substantial gains ahead of the opening, trimming Monday’s losses.
• XAUUSD is technically bullish and trading near its all-time high at $2,075.64 a troy ounce. 

Gold Price consolidates at around the $2,060 level as US President Joe Biden and UK Prime Minister Boris Johnson have announced new sanctions on Russia amid its latest invasion of Ukraine. They first announced they are banning all crude oil imports from Moscow, including gas and energy, “after consulting with allies.” Market participants have already anticipated this move, as it has been making the rounds since Monday. Spot gold broke higher and reached a fresh multi-month high of $2,063.53 a troy ounce early US session. Commodity prices resumed their advances after Wall Street opened lower, adding to Monday’s losses.  

As for the UK government, they announced that they would phase out the import of Russian oil and oil products by the end of 2022. The idea is to transition to provide ample time for markets and businesses to replace Russian imports. Even further, they noted that the current reliance on Russian natural gas accounts for 4% of the supply and that they are already looking into alternatives, adding that the country will work with other import partners to secure further supplies. 

Gold Price is currently trading at around $2,060 a troy ounce, overbought but without signs of technical exhaustion. The next relevant level to watch is $2,075.64, where it set a record high in August 2020, while beyond the level, market players will be looking for a test of the 2,100 threshold. Given that the bright metal keeps pressuring intraday highs, new record levels seem likely in the near term. Meanwhile, government bond yields are up around the world, reflecting an improving market’s mood. The yield on the US 10-year Treasury note is up by ten basis points, hovering around 1.85%. Nevertheless, the sentiment could take a turn for the worse anytime amid the ongoing crisis between Russia and Ukraine.  

Demand for the American currency eased partially, as concerns about developments in Eastern Europe cooled down a bit. Asian shares edged lower, although their European counterparts traded in the green, leading a comeback among US indexes up ahead of the opening and limiting the dollar’s demand to the benefit of the bright metal. The third round of peace talks that took place on Monday ended without material solutions, but Gold Price investors are now looking for fresh news, mainly another round of talks next Thursday in Turkey.

Also read: Gold re-enters 2,000 zone; outlook bullish

Gold Price technical outlook

XAUUSD pulled back from the mentioned high but met buyers at $1,999.35, a sign that buyers are willing to defend the $2,000 mark. Gold Price is overbought in the near term, although there are no technical signs of bullish exhaustion, which maintains the risk skewed to the upside for the American session. Beyond the daily high, the next resistance level is the record high set in August 2020 at 2,075.64 a troy ounce.

When measuring the January/March rally, from $1,780.15 to $2,020.96, the 38.2% retracement is located at $1,928.31, which means that a decline towards such a level could be considered corrective. For the short-term, once below the aforementioned $1,999.35, XAUUSD could decline to $1,964, the 23.6% retracement of the mentioned run.