Gold Prices Whipsaw Falling Following an Initial Surge

Gold prices moved higher but here unable to hold on to gains. Geopolitical risks continue to help buoy the yellow metal. The attack by Russia on Ukraine sent shock waves around the globe, but safe-haven products seemed to brush off those risks, following word from the White House that they would levy sanctions but not cut Russia off Swift.

Jobless claims were stronger than expected and totaled 232,000 for the week ended February 19, the Labor Department reported. That was below the 235,000 expected and down 17,000 from the previous week.

Bond yields whipsawed and moved lower, following the jobless claims data and softer than expected Personal Consumption Expenditures information released on Thursday’s GDP report released by the U.S. Commerce Department.

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 whipsawed, hitting an 8-year high but was unable to hold on to the gains. Prices remain above support near the 10-day moving average that comes in near $1,884. Resistance is seen near the June highs at 1,916.

The 50-day moving average has crossed above the 200-day moving average. This moving average crossover usually points to a long-term upward trend that is now in place.

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 95, above the overbought trigger level of 80. The movement of the fast stochastic could foreshadow a correction in gold prices.

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