Gold prices keep climbing north gradually, approaching a solid local resistance around $1,960 on Thursday. The precious metal is also challenging a slightly ascending 20-DMA, a daily close above, which would confirm the latest breakout.
On the weekly timeframes, the prices stay well above the key SMAs, now looking more upbeat after a sell-off witnessed last week. Interestingly, the bullion extends the ascend despite the rallying dollar. The US Dollar Index is nearing the 99.00 handle due to a combination of persisting safe-haven demand and an even more hawkish shift in the Fed’s rhetoric.
Of note, the USD/JPY pair jumped to the 122.00 figure for the first time since December 2015 and looks set to finish the third bullish week in a row. The main reason behind gold’s resilience in the face of the elevated US currency is the geopolitical uncertainty surrounding Ukraine that keeps mounting as Russia-Ukraine talks fail to bring any significant progress. At the same time, Western governments continue to introduce new sanctions against Moscow.
Risk trades have become more favorable these days, but the overall tone in the global financial markets remains cautious, adding to the appeal of the non-yielding precious metal. Gold prices will likely continue to advance north as long as tensions rise globally.
Against this backdrop, the XAU/USD pair could regain the $2,000 psychological level and get back to an all-time high of $2,070 seen earlier this month. However, in the immediate term, the bullion could retreat amid some profit-taking. On the downside, the prices need to hold above the $1,900 figure to stay afloat in the coming days.