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- While the risky assets such as assets and crypto had good gains, the gold market was trading near daily lows after losing more than $70 and dropping below $2,000 an ounce.
- The precious metal was unsuccessful at holding its gains after reaching new record highs of $2,078.80.April Comex’s gold futures dropped by 2.59% and was the last trading at $1,990.30 on the very same day.
- Edward Moya, the senior market analyst at OANDA, says the precious metal can make a trading range between the $1,965 and $2,050 levels.
After losing more than $70 and dropping below $2,000 an ounce, the gold market traded near daily lows. The selloff came at the time when oil fell 10%, and risk assets like stocks and crypto experienced substantial gains.
With oil, platinum, silver, wheat, and corn suffering losses, the commodities rally slowed down on Wednesday. West Texas Intermediate crude dropped to $110, dropping 10%, while Brent crude fell 11% at $114.
Edward Moya, the senior market analyst at OANDA, explains at the beginning of the trading week, WTI crude was at the highs and is now 10% lower. However, the drop seems premature, considering the short-term supply disruption that remains highly elevated.
Meanwhile, the risk assets bounced back. The Dow rose 2.35%, and the S&P was up 2.79% on the day. Bitcoin also surged along with U.S stocks, rising 8% and reaching $42,000 from $39,000.
On Tuesday, Gold failed to hold its gains once it reached new record highs of $2,078.80. On the day of April Comex, gold futures plummeted by 2.59% and was the last trading at $1,990.30.
The situation in Ukraine needs more improvement; otherwise, Gold reacting to a rebound in risk-on sentiment on Wall Street could be premature.
Moya further says that today’s rally could be more of a dip-buying; however, the complex situation would need some time to fix as it is pretty unlikely that Ukraine will change its stance on recognizing Crimea separatist-held regions as Russia.
The reason behind Wall Street’s positive attitude is the statement of Ukrainian President Volodymyr Zelensky that he has cooled down on the matter of his country joining NATO.
Moya noted on Wednesday that Gold could continue to trade near lows if the U.S stocks continue to defend the lows made at the time of the initial shock that occurred at the start of the conflict. The precious metal can form a trading range between the $1,965 and $2,050 levels.
A strategist at DailyFX, Michael Boutros says a significant support level to look at is the $1,922 an ounce. He said on Wednesday that above $1,922, the trade remains constructive.
Han Tan, Exinity Group’s chief market analyst, explains that while the situation remains tense and uncertainty towers the global economy, Gold will have more profits.
All Eyes On CPI Number
There is one more big release that markets have eyes on besides the geopolitical angle and which is Thursday’s CPI number out of the U.S.
According to the economists, the inflation of February is likely to be accelerated and is far from reaching its peak. After rising to 40-year highs of 7.5% in January, Market consensus calls are expecting to see the annual CPI headline number at 7.9% in February.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
