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Gold price up as high anxiety grips marketplace

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(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Monday, on safe-haven demand as the Russia-Ukraine geopolitical situation is deteriorating. The situation is very fluid and the metals markets will continue reacting to the latest news headlines on the matter. April gold futures were last up $25.60 at $1,913.10 and May Comex silver was last up $0.438 at $24.455 an ounce.

Marketplace anxiety is very high to start the trading week, following the weekend news that Russian President Putin put is military on high nuclear alert after the U.S. and Europe slapped severe sanctions on Russia for its invasion of Ukraine, including the West’s removal of various Russian banks from the important SWIFT financial system. This could further disrupt the flow of commodity trade worldwide.

Both SocGen SA and Credit Suisse AG have stopped financing commodities trading from Russia. Russian and Ukrainian officials are meeting today for talks aimed at ending the four-day-old war. Ukrainian President Zelensky said he did not believe much would come out of the meeting.

Global stocks markets were lower overnight and the U.S. stock indexes are pointed toward sharply lower openings when the New York day session begins. A Barrons headline Monday reads, “Tougher sanctions spark Russian market mayhem; it’s threatening to spread.”

Gold prices are sharply higher on safe-haven demand. The Bank of Russia said it will start buying gold on the domestic precious metals market. Russia announced an end to its two-year gold-buying hiatus, as the Russian ruble sank to a record low versus the U.S. dollar. Russia’s central bank had to raise its main interest rate to 20%, from 9.5%. Russia is the fifth-largest sovereign gold owner and gold accounts for 20% of world reserves.

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The marketplace wonders what Putin will do next. It appears Ukraine’s military is putting up stiffer resistance than Putin thought. And the strong economic sanctions from the West are quickly crippling the Russian economy. Russian cyber attacks on the West seem likely soon. With Putin having seemingly painted himself into a corner, the world is also now thinking about the unthinkable: a nuclear exchange between the Russia and the U.S.

The key outside markets today see Nymex crude oil prices posting sharp gains and trading around $96.00 a barrel. The U.S. dollar index is higher. The benchmark U.S. 10-year Treasury note is presently yielding 1.922%. U.S. Treasuries are also seeing safe-haven buying interest.

U.S. economic data due for release Monday includes advance economic indicators, the Chicago ISM business survey, and the Texas manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the April gold futures bulls have the solid overall near-term technical advantage but appear exhausted and in need of a price pause. Prices are still trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above major resistance at the February high of $1,976.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at the overnight high of $1,935.20 and then at $1,950.00. First support is seen at $1,900.00 and then at the overnight low of $1,895.50. Wyckoff's Market Rating: 8.0.

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have the overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $25.705 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the overnight high of $24.88 and then at $25.00. Next support is seen at $24.00 and then at last week’s low of $23.755. Wyckoff's Market Rating: 6.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.