The previous article mentioned that gold’s consolidation is coming to an end, waiting to break through the boring situation. It does broke through in February, and recently hit a new high of USD1,908 since June 2021. It again broke through USD1,900 after 8 months. This is mainly due to the rise of political tension in Russia and Ukraine and the shock of high inflation that prompted investors to seek safety. The price of gold then was pushed up as a result.

In addition, we have seen that SPDR Gold Shares, the world's largest gold ETF, has increased its holdings by more than 50 tons since December last year. Thus, almost all external conditions support further gains in gold until now.

Under the current situation, the gold price is still towards the bulls in views, but it will inevitably be fluctuated by the geopolitical factors of Russia and Ukraine in short term. Gold has always been quite sensitive to war. Once a war begins, there is a possibility of a sharp rise at any time, and the price of gold may further challenge the record high of USD2,075 in August 2020 within a few months. On the contrary, it will limit the rise of gold price and there is a risk of falling back if the tension between Russia and Ukraine eases. Therefore, I think that gold should not be chasing high at present, and it is better to look for long signals after the price reduction. 

Technically, the gold is rising in the weekly chart, daily chart, and four small charts, and the bottom is gradually raised, indicating that there is solid technical support. In addition, the large-scale triangle on the weekly chart mentioned above has successfully exploded, and gold finally chose to rise. Considering that the breakthrough at the weekly level is quite strong and with the analysis of the fundamentals, I personally think that the medium and long-term goals in the future are expected to reach USD2,000 above. 

On the daily chart, it is now just at the resistance level of the previous high point of USD1,910. If it is blocked and falls, there is a chance to fall back to the lower support position of USD1,830 - USD1,850 and then move up. However, USD1,830 is very attractive and you take the opportunity to buy if it tends to turn upward. However, stop your loss below USD1,820. The profit is quite considerable even if the risk-reward ratio of the first level target of USD$2,000 is more than 1:10, but the bottom USD$1,830 is the callback position for the gold ratio of 0.618, which cannot be broken down. Once it falls, the rising pattern will come to the end.

Hugo Leong Gold Analyst of Hantec Group