Gold Prices Move Higher and Consolidate

Gold prices edged higher on Monday and could not settle near the highs despite geopolitical risks. The dollar moved higher on safe-haven flows, while Treasury yields declined as the markets started to price in less of a change of rate hikes in the wake of the Russian Attacks on Ukraine.

Russian tanks are fast approaching the Ukrainian capital but are meeting significant resistance. Germany is poised to send thousands of military equipment and bolster its defense department. The U.S., E.U., U.K., and Canada are now taking dozens of Russian banks off the Swift system, which will make international payments very difficult.

The Federal Reserve two-day meeting concludes on March 16. Yields have been declining to reflect less chance of a large rate hike. This situation has now increased the likelihood that NATO will become stronger

Technical Analysis

Gold prices moved higher and closed shy of an 8-year high. Prices remain above support near the 10-day moving average that comes in near $1,892. 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 positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is decelerating, which likely points to a period of consolidation.