Gold Prices Drop as Russia States They will Hold Talks

Gold prices moved lower on Friday after failing to break through resistance on Thursday. Geopolitical risks continue to drive price action. On Friday, Russia announced that it would come to the table and talk, but their words did not seem to match their actions.

Russian forces pressed closer to the Ukrainian capital Friday as air raid sirens blared and people huddled for shelter. The Defense Ministry reported militants just miles from Kyiv’s center and predawn explosions jolted the city.

On Friday, Russian Foreign Minister Sergei Lavrov said that Moscow would be ready to hold talks with Kyiv, but only once Ukraine’s military had laid down its arms. Ukrainian President Volodymyr Zelensky announced that 137 Ukrainians had been killed and 316 wounded after the first day of fighting

The West continues to deliberate on how to deal with a country that is outside of Nato. It appears that President Biden and the EU are holding a few cards in their hands to escalate the sanctions and eventually crush the Russian economy if they continue to advance through Eastern Europe.

Technical Analysis

Gold prices moved lower after hitting an 8-year high earlier in the week. Prices remain above support near the 10-day moving average that comes in near $1,888. Resistance is seen near the June highs at 1,916.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The movement of the fast stochastic could foreshadow a correction in gold prices.

The medium-term momentum is positive as the histogram prints in positive territory with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is decelerating, which likely points to a period of consolidation.