Gold testing the highest of a serious consolidation sample. What Ukraine-Russia battle means

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Gold weekly chart

Gold has been consolidating round $1800 for greater than a 12 months however there is a collection of upper lows that is been constructing because the begin of 2021 and now it is threatening to interrupt out of the long-term wedge.

It is approach too early to say at present’s $35 rally and push via the highest is a breakout nevertheless it’s value preserving a detailed eye on.

My inclination is not essentially to be lengthy gold on a Russian invasion of Ukraine. If Russia is hit by harsh sanctions, it might should dip into its monumental gold reserves to prop up its forex. So I am actually cautious on that angle.

The flip facet is that if oil and gasoline costs spike, it is going to be a brutal shock to inflation expectations within the US and Europe, that means that charges might run agressively increased and bonds might crumble. That leaves gold as a protected haven.

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