- Gold prices dropped due to firmer U.S. Treasury yields and improved risk appetite on hopes of peace between Russia and Ukraine.
- Pessimism surrounding China’s coronavirus conditions weighs on the gold prices.
- Indian gold dealers were forced to offer the steepest discount in six years last week.
The yellow metal prices stays pressured on Monday due to rise of U.S. Treasury yields on rate hike expectations, with higher risk appetite on hopes of peace between Russia and Ukraine which dents on bullion’s safe-haven appeal further.
The brighter progress on the Ukraine-Russia peace talks improved the market sentiment weighing on the yellow metal. Russian President Vladimir Putin said last week there had been some progress in Moscow’s talks with Ukraine, but provided no details.
However, Chatters surrounding Russian prosecutors’ warnings to the West and Pentagon’s press secretary John Kirby’s comments suggesting Russian forces are “broadening their target sets” keep the XAU/USD buyers hopeful.
Further weighing on the gold prices could be the firmer US Treasury yields and pessimism surrounding China’s coronavirus conditions.
That said China is one of the world’s largest gold consumers and the fresh fears of covid, due to the highest daily infections in two years, negatively affects the gold prices.
Meanwhile, physical gold dealers in India were forced to offer the steepest discount in six years last week to lure customers put off by a jump in domestic prices, with some people in top Asian hubs selling their bullion to cash in on the rally.
Elsewhere, the cues from the US Consumer Price Index (CPI) dictate a 50 basis point (bps) interest rate decision from the Fed on a print of 7.9%.
XAU/USD 4 Hour Chart:
Support: 1964.9 (S1), 1941.5 (S2), 1924.7 (S3).
Resistance: 2005.2 (R1), 2022.0 (R2), 2045.4 (R3).
The Fed, Headlines of Russia – Ukraine jitters are the key factors which will direct the XAU/USD further. In the meantime, we expect a bearish trend for XAU/USD.
