Gold Prices Break Out on Continued Russia Ukraine Concerns
Gold prices continued to move higher, breaking out above trend line resistance as concern over an invasion by Russia continues to haunt the markets. The White House told American’s in Russia and Ukraine to get out. U.S. yields moved higher as traders refocused on the Fed and the central bank’s likelihood to raise rates by 50-basis points in March. The interest rate curve is currently pricing 6-interest rate hikes in 2022. The Fed’s Bullard say that the central bank’s credibility is on the line and that rate increases need to be front-loaded.
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Technical Analysis
Gold prices rallied. Prices remain above support which was former resistance seen near a downward sloping trend line that comes in near $1,855. Resistance is seen near the November highs at 1,877. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index has generated a crossover buy signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in positive territory with an upward sloping trajectory pointing to higher prices.
Bullard Makes Case For Front Loaded Rate Hikes
St. Louis Federal Reserve President James Bullard made his case for a rapid increase in interest rates, saying that the central bank needs to react to accelerating inflation. Those comments came after Bullard rattled markets Thursday by saying he thinks the Fed should raise its benchmark short-term borrowing rate a whole percentage point by July.