Higher On Geopolitical Risk

Gold deals ~$20/oz firmer to print $1,909.3/oz at writing, backing away from the session’s best levels ($1,930.9/oz) after gapping higher on developments in the Russia-Ukraine situation over the weekend.

• To recap, the U.S., UK, EU, Japan, and Canada have expanded sanctions against Russia, including the exclusion of some Russian banks from SWIFT, in addition to imposing sanctions on the Russian central bank. Russian President Putin has since responded by placing the country’s nuclear forces on “high alert.” The pickup in geopolitical tension has facilitated risk-off flows on Monday’s Asian session.
• Ukrainian officials will meet Russian negotiators on the Belarus-Ukraine border for talks, although an immediate resolution is not expected. Ukrainian President Zelensky has expressed scepticism re: the talks, while Russian news agency TASS has reported that Russian officials will only speak about the possibility of fulfilling Moscow’s demands for “demilitarization and denazification”.
• From a technical perspective, the outlook remains bullish for gold despite recent price volatility. Resistance is located at ~$1,939.2 (top of the bull channel drawn from the Aug 9 ’21 low), while support is some distance away at $1,878.4 (Feb 24 low and key short-term support).