Gold Jumps to 1-Month Peak as the Ukraine Crisis Escalates

Gold bars

Gold prices climbed to their highest level since March 14 as Russian attacks on Ukraine intensified. The escalated crisis dampened risk appetite and pushed investors towards safe-haven assets. But higher U.S. Treasury yields retrained the bullion’s advances. The benchmark 10-year note soared to its highest level since December 2018.

Spot gold is currently trading at $1,989.47 per ounce as of 0730 GMT.

On Sunday, Ukrainian soldiers in Mariupol resisted the Russian demand to lay down arms. Moscow claimed that it completely seized the strategic southern port city after two months of bloody fighting. But Ukrainian Defense Minister Denys Shmyhal said the cist the has not fallen and troops were still fighting.

Russian bombings continue elsewhere around Ukraine. Authorities reported multiple explosions in Lviv and Dnipropetrovsk, and a Reuters reporter heard a series of blasts in Kyiv. President Volodymyr Zelensky said Russian bombings killed 18 people and wounded 100 in Kharkiv over the past four days. He condemned the attacks against ordinary residential quarters and ordinary civilians.

DailyFX currency strategist Ilya Spivak noted some risk aversion in the market due to the Russia-Ukraine situation. But he warned that thin liquidity could exaggerate price action. Spivak sees $2,000 as the immediate resistance price level for the yellow metal.

On the technical front, Reuters analyst Wang Tao predicted spot gold to climb to the $1,998-$2,012 range after breaching the resistance level at $1,984 an ounce.

FXStreet senior analyst Dhwani Mehta agreed that gold could retest the $2,000 mark if it breaks through the $1,990 level. She noted that the 14-day Relative Strength Index is inching higher above the midline, indicating a bullish undertone. However, if the bullion fails to surpass the $1,990 barrier, it could drop to $1,971 and then $1,961.

Mehta also believes that the negative tone in the market sentiment would support gold prices. But the bullion could face a challenge if the dollar and U.S. Treasury yields continue to rise. She also expects St. Louis Fed President James Bullard’s speech to influence gold’s price action.

DailyFX senior strategist James Stanly added that gold’s weekly chart confirmed the formation of an evening star pattern. It indicates a potential reversal of the bullion’s recent rally. But that would be invalidated if the yellow metal closes near all-time highs of $2,089.