Gold retraces as tensions calm

New York (Feb 15)  Gold has had a decent run in the past few sessions as geopolitical issues between Ukraine and Russia sent the safe-haven higher. In the European session, there have been some headlines noting that some Russian troops had been leaving the area and the price has retraced somewhat. Away from politics, there is the small matter of the Fed meeting on Wednesday. Traders will be looking for clues about the aggressiveness of the upcoming rate hiking cycle. Markets have been pricing in a hike in March but the extent in which the FOMC move is still being debated.

Looking at the technicals, the price hit a brick wall at the previous wave high on 16th November. this also confluences with the grey channel trendline. Now the market has come off slightly, the support levels on the 4-hour chart below could come into focus. The orange line at $1851/oz has been used to good effect as both support and resistance. Below that, the blue horizontal line at $1830/oz is the next one up.

If there is an escalation in the Ukraine/Russia conflict or the Fed indicates a less hawkish stance then the previous wave high could come back into play. The good news for the bulls is the fact that the price is way above the volume point of control (VPOC) near $1792/oz. Also, the trend is still making higher highs and higher lows so the bulls are still in charge.

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