Gold Prices Whipsaw as Geopolitical Risks Generate Volatility

Gold prices surged higher but finished well off the highs of the day, as geopolitical risks generated volatility. Bond prices moved lower as U.S. bonds got a safe-haven bid. and moved lower as the decline in yields weighed on the greenback. There continues to be a lack of direction as the market is unsure if there will be an attack, as Macron attempted to put together a meeting of Biden and Putin based on the notion that Russia would hold off on an attack.

Technical Analysis

Gold prices consolidated and whipsawed near 8-year highs. Prices remain above support near the 10-day moving average that comes in near $1,871. Resistance is seen near the June highs at 1,916, which was tested on Tuesday. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought as the fast stochastic is printing a reading of 90, above the overbought trigger level of 80. Short-term momentum has turned positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Consumer Confidence Fell

The Conference Board reported that the consumer confidence index fell slightly to 110.5, from 111.11 in January following a decline a month earlier. The present situation index, measuring current economic conditions, improved to 145.1 from 144.5 in January. The expectations index measures how consumers view the short-term outlook for the economy declined to 87.5, down from 88.8 in January.