A war in Ukraine, inflation worries, and risks to global growth boosted gold’s appeal as a haven asset after it posted the biggest quarterly advance in almost two years.
In the first quarter, spot gold posted gains of 5.9%, the highest since June 30, 2020.
The beginning of the new quarter begins with the resumption of talks between Ukraine and Russia, as well as the release of the monthly U.S. jobs report.
- As traders continue to assess the prospects for rate hikes in major economies, gold is heading for a weekly loss.
- An escalating conflict has disrupted commodity flows, which has caused price pressures.
- Consumption grew at the fastest pace in four decades in February, but inflation-adjusted spending declined.
- During the year, the Federal Reserve’s inflation target was reached with an increase of 6.4% in the personal consumption expenditures price index.
Pundits are betting that the Fed will tighten monetary policy much more aggressively than they previously predicted. The non-interest-bearing precious metal is typically impacted by higher rates.
- Despite moving higher, gold prices remained range-bound. Short-term support is now at 1,936 after the price slipped past resistance.
- Long-term resistance is near 2,070, the March high. Fast stochastic has generated a crossover buy signal as short-term momentum has turned positive.
- Momentum has slowed in the medium term. Gold prices are falling based on the MACD histogram, which prints in negative territory.