After the spot gold price jumped high in early trading on Monday, it has fluctuated widely near the round $1900 mark, the war between Russia and Ukraine has been volatile, and the gold market has also fluctuated sharply.
Safe-haven demand pushed gold up 2 per cent at the start of the Asian trading session, kicking off a new week with strong momentum. However, analysts point out that in this uncertain environment, the dollar is still strong as the world's dominant currency, while gold prices will come under some pressure under a strong dollar.
Daily chart of spot gold price
Gold jumped short and opened higher at a time when u.s. stocks were under strong selling pressure, with standard & poor's 500 index futures trading down 2% at the start of the week.
The market reflected the trend of NATO countries imposing sanctions on Russia over the weekend, with NATO countries kicking some Russian banks out of the SWIFT global payment system.
Traders need to assess more about the impact of geographies on gold prices. On Sunday, Russian President Vladimir Putin ordered his country's deterrent, including nuclear weapons, on maximum alert.
The United States and other Western countries are also providing military assistance to Ukraine as Russian troops surround and approach the Ukrainian capital, Kiev.
Analysts say gold could quickly rise to $2000 an ounce if tensions continue to escalate.
David Madden David Madden, a market analyst at Equiti Capital, said that in the current environment of geopolitical uncertainty, he could see the price of gold rise to an all-time high in a few days.
Is there a greater risk of a correction in gold prices after a wide shock of $100? Some analysts say gold still faces many headwinds and volatility is increasing. Last week, gold prices fluctuated nearly $100 in intraday trading as Russia invaded Ukraine.
Christopher Vecchio, senior market strategist at DailyFx.com, said in a report on Sunday that Thursday's intraday high could mark gold's peak this year.
From here, Christopher Vecchio points out, the path of gold prices is clear: world War III or depression. If gold prices start to rise from now on, the conflict between Russia and Ukraine needs to escalate sharply, eventually involving the European Union, the United States and the broader NATO alliance. Otherwise, in the economic environment defined by slower growth in the G7 countries and more hawkish central banks, which is pushing up real interest rates, gold is not suitable for sustaining a meaningful rise.
The spot gold price is 1895.00 USD / oz at 1515 / 34 Beijing time.
