What let Gold Spike Up Suddently During Late Asian Hours?
Due to the ongoing war in Ukraine following Russia’s full-scale invasion, commodities are facing a massive rally. In addition, increases in raw commodities feed into food prices, increasing concerns over future inflation expectations as Wheat prices jumped to 14-year highs on Monday.
Do you know that Russia is the world’s largest wheat exporter? Now because of the current scenario, buyers are looking for alternative options due to financial sanctions introduced against Russia. Russia and Ukraine account for nearly 30% of global wheat exports and 19% of corn exports. Rising inflation fears and geopolitical uncertainty pushed investors into gold-backed exchange-traded funds (ETFs), helping the price rise in gold since August 2020.
- The Food Price Index, which tracks the international prices of items such as vegetable oils and dairy products, averaged 140.7 points last month, or nearly four percent up from January – UN.
- The global gold ETF market saw net inflows of 35.3 tonnes, valued at $2.1 billion. The report noted that inflows were even split among North American and European-listed funds – World Gold Council (WGC).
- Major Countries Ban Energy Supply from Russia.
- The bulk of these outflows were driven by Chinese ETFs likely due to tactical selling as the gold price surged.
- WGC does not expect investor’s eagerness for gold to shift anytime soon, even as the Federal Reserve looks to start raising interest rates next week.
- In a low interest rate environment, with rising inflation pressures, gold remains a better portfolio diversifier compared to bonds – WGC.
Important Updates From Russia – Ukraine
- Foreign Ministers of Russia and Ukraine to meet in Turkey on March 10, reports Times Now.
- Russia’s offensive in Ukraine continued but at a significantly slower pace on Tuesday and a second senior Russian commander had been killed, Ukrainian military and intelligence said.
- In the city of Irpin, on the northwest edge of Kyiv, residents ran with their young children in strollers, or cradling babies in arms, while others carried pet carriers and plastic bags and suitcases – Reuters.
- Foreign Minister Marise Payne said that the government was working with Facebook, Twitter and Google to stop the spread of content from Russian state media within Australia.
- Ukraine will receive over $700 million from the World Bank to help fund the country’s essential services as it battles invading Russian forces.
- Ukraine says aircraft bombed cities overnight.
- The Gold rises extremely and touches $2,021 mark.
- Today pair made intraday high at $2,021 and low at $1,981 mark.
- A day chart and H1 chart with triple EMA suggest bullish trend for the time being.
- A sustained close above $2,022 on H1 chart requires for the upside rally.
- Alternatively, a consistent close below $1,991 on H1 will check further supports.
Take a look and do trade wisely!