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Gold Remains Highly Volatile in this Geo Political Uncertainty, Why?; March 9, 2022

Gold Remains Highly Volatile in this Geo Political Uncertainty, Why?

According to the latest IMF data, Russia is holding nearly 2,300 tonnes of gold as of the end of January 2022 — the fifth-biggest sovereign gold owner. At the beginning of March, the Bank of Russia gave statement that, it would be restarting its official domestic gold purchases after a two-year gap.

Accordign to the sources, U.S. lawmakers are now focusing on the Russia’s Gold Reserves. Some speculations are going on that Russia could soon resort to gold-selling to battle sanctions and a plummeting ruble but on the other side, U.S. senators want to make sure Russia cannot use its $130 billion worth of gold to avoid sanctions introduced by the West.

If U.S. introduced the latest legislation, it would implement secondary sanctions on American entities transacting with or transporting gold from Russia’s Central Bank holdings. Sanctions would also be applied to Americans selling gold electronically or physically in Russia. This legislation would apply secondary sanctions to parties who help Russia finance their war by buying or selling this gold.

As per the history, when gold and the U.S. dollar rally in tandem, that has usually been followed by much stronger gold prices to come.

Let’s see how and when any new sanctions regarding Russia’s gold has been introduced.

Key Headlines From Russia – Ukraine:

  • Russia may be using unguided, “dumb” bombs in Ukraine war, US official.
  • Governor of Ukraine’s Donetsk region says Russian air strike on Mariupol hospital happened during agreed ceasefire period.
  • Russian defence ministry: Almost 180,000 evacuated from Ukraine to Russia since February 24.
  • Russian President Vladimir Putin and German Chancellor Olaf Scholz on Wednesday discussed the implementation of humanitarian corridors to evacuate civilians, the Kremlin said.
  • The Russian army has admitted for the first time that conscripts were taking part in Moscow’s military advance in Ukraine, after President Vladimir Putin vowed only professional soldiers were there.
  • Europe faces pressure to join boycott of Russian oil and gas.
  • Canadian Prime Minister Justin Trudeau spoke with Ukrainian President Volodymyr Zelensky on Wednesday and promised to send more military equipment to Ukraine.
  • The World Economic Forum says it is freezing all relations with Russian entities, and will not allow anyone on the sanctions list to take part in the annual high-powered meeting in Davos.
  • G7 energy ministers to discuss next steps on Russian oil and gas: UK minister.

Source:Timesofindia

Technical View:

XAU/USD (Gold):

  • Gold falls drastically during U.S. session and touches $1,976 mark.
  • Yesterday gold touched $2,070, highest level since August 2020.
  • Today pair made intraday high at $2,059 and low at $1,976 mark.
  • A triple EMA on a day chart is up and H1 chart suggests bearish trend for the time being.
  • A sustained close above $2,017 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,978 on H1 chart will check further supports.
Supports
Resistances
$1,970
$2,017
$1,962
$2,026
$1,955
$2,032
$1,948
$2,038
$1,940
$2,044

 
Take a look and do trade wisely!
Good Luck

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