Panic gripped financial markets after Russia launched a military attack on Ukraine. Moscow attacked not only the Donbass region, but also threatened Kiev during the American session.
Due to these developments, gold reached $1,974.40, a level last seen in September 2020, but dropped sharply from that level. Currently, it trades around 1,909 above 5/8 Murray.
Gold prices see a sharp correction from the highs of $1,974 to the zone $1,877. Gold lost almost $100 of gains in less than 12 hours, erasing gains since February 16.
Volatility remains at extreme levels in metals, in the last hours it has recovered more than $30 from 1,877 and surpassing the level of 1,907 in less than 8 hours.
A consolidation on 4-hour charts above the 21 SMA (1,911) could give gold a strong bullish push and reach 1,937 again and even 7/8 Murray in 1,968.
Conversely, a daily close below 1,906 could drop towards the bottom of the uptrend channel at 1,985. A sharp break below 4/8 Murray at 1,875 will be the start of a trend reversal and a drop towards the 200 EMA in 1,943.
The eagle indicator is showing a bearish signal after having reached the overbought level. However, this could be considered a correction to resume the uptrend and could go as far as the psychological level of $2000.
Our trading plan for the next few hours is to continue to buy gold as long as it remains above the 21 SMA located at 1,911, with targets at 1,937 and 1,964.
Support and Resistance Levels for February 25 - 28, 2022
Resistance (3) 1,959
Resistance (2) 1,938
Resistance (1) 1,918
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Support (1) 1,891
Support (2) 1,875
Support (3) 1,860
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Scenario
Timeframe H4
Recommendation: buy above
Entry Point 1,910
Take Profit 1,937; 1,968
Stop Loss 1,904
Murray Levels 1,968 (7/8), 1,938(6/8) 1,906(5/8), 1,875(4/8)
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