Higher In Asia

Gold trades $5/oz firmer, printing ~$1,927/oz at typing. The precious metal currently operates clear of Friday’s trough as focus turns to developments in the Russia-Ukraine conflict (particularly on a possible diplomatic resolution from ongoing ceasefire talks), with the dust having settled from the FOMC’s monetary policy announcement last week.

• To recap, gold closed ~$70 lower last week, for its sharpest weekly drop in ~9 months. The move came as the Fed hiked rates on Wednesday (signalling at least six more 25bp hikes in ’22), while elsewhere, daily talks between Ukrainian and Russian negotiators helped fuel some optimism for a diplomatic resolution, removing some of the geopolitical risk premium from gold re: the war in Ukraine.
• Focusing on Russia-Ukraine talks, negotiators from both sides have planned to resume talks on Monday (timing unconfirmed at writing). The top Ukrainian negotiator (Podolyak) has cautioned that talks may take “several weeks” partly due to well-documented positions that Kyiv refuses to concede (i.e. recognition of breakaway regions & Russian annexation of Crimea), although he also stated that a ceasefire could be agreed upon “in days” (as opposed to a peace deal happening quickly). A note that Turkey’s FM Kalin also said over the weekend that agreement between Russia and Ukraine over “critical” issues was near, expressing that he was “hopeful for a ceasefire”.
• Looking to technical levels, bullion’s short-term conditions remain bearish, following the pullback from Mar 8 cycle highs at $2,070.4/oz. The longer-term bullish trend remains intact however, with the pullback considered to be corrective. Support is situated at $1,895.3 (Mar 15 low), while resistance is seen at $1,954.7/oz (Mar 15 high).