Yesterday in the American session, gold reached the swing low of 1,910.60. From that level, it has been bouncing and today in the European session it reached the high at 1,934.95. A recovery of $24 means that the market is still vulnerable to any events regarding the Russian invasion.
Market sentiment remains fragile and investors could return to gold as a safe-haven, due to the lack of progress in the peace talks between Russia and Ukraine. In fact, Italian Prime Minister Mario Draghi has pointed out that Russia is showing no interest in a truce for successful peace talks.
This, in turn, weighed on appetite for risk assets, which was evident from the start of the Asian session by the modest pullback in stock markets. Besides, Wall Street indices are benefiting gold safe-haven.
Importantly, the Fed indicated last week that it could raise interest rates in the remaining six meetings in 2022. This could weigh on gold in the medium term and its price could return to levels of 1,800 and down to 1,700
According to the 1-hour chart, we can see that XAU/USD is trading inside a symmetrical triangle that was formed since March 16. From a technical perspective, price movements between the highs and lows of this triangle point the indecision among investors.
This comes after the recent sharp pullback from near the all-time high at 2,070. The ongoing move could be classified as a bearish consolidation phase. That said, it will be wise to wait for a sharp break of this symmetrical triangle in either direction before positioning for any move.
Meanwhile, the 1,910 area seems to defend the immediate fall as it coincides with the bottom of the symmetrical triangle. Sustained weakness below that level will reaffirm the negative bias and will drag gold prices towards the next relevant support near 6/8 Murray at 1,875.
On the other hand, immediate resistance is located near the area 1,1938 that matches the 200 EMA on H1. A sharp break of this level should pave the way for additional gains. The momentum could then push gold towards the resistance at 1,975 and above this level. The bulls will be targeting the key psychological level of $2,000.
