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Gold Surpasses $2,000 Mark on Ukraine Crisis

The news shaping the markets today

Russia declared a ceasefire in Ukraine for humanitarian corridors in Kyiv, Chernihiv, Sumy, Kharkiv and Mariupol, which sent the US dollar index slightly lower this morning.


UK’s retail sales grew 2.7% year-over-year in February, versus 8.1% growth in the prior month. The GBP/USD rose in forex trading this morning.


Australia’s NAB business confidence index surged to 13 in February, from a reading of 4 in the prior month. This being the highest reading in four months lent support to the AUD/USD forex pair.


Japan’s current account deficit widened to ¥1,188.7 billion in January, from ¥506.3 billion in the year-ago month. The gap was higher than the market expectations of ¥880.2 billion, which exerted pressure on the JPY/USD forex pair.


US consumer credit rose by merely $6.84 billion in January, after a $23.38 billion rise in the prior month, sending the EUR/USD pair higher in forex trading this morning.

 

What’s happening: Gold prices rose sharply on Monday amid escalating Russia-Ukraine tensions.

What happened: The yellow metal spiked past the $2,000 mark for the first time in one-and-a-half years.

Traders rushed to safe-haven options as the attack on Ukraine escalated and Western countries look to impose more sanctions on Russia.

Why it matters: US Secretary of State Antony Blinken had said on Sunday that the country was looking to ban imports of Russian crude and natural gas.

The latest news came after Western nations announced several moves to cripple Russia’s economy due to its Ukraine invasion.

Russian military forces have killed more than 2,000 of Ukraine’s civilians in cities like Kharkiv and are advancing towards the capital of Kyiv. The crisis has prevented about 200,000 people from leaving the Ukrainian city of Mariupol.

Gold prices have been on an uptrend despite the US Federal Reserve and other major central banks looking to hike interest rates to combat surging inflation levels.

Gold for April delivery gained $29.30, or 1.5%, to close at $1,995.90 an ounce on the Comex. The yellow metal surged as high as $2,007.50 earlier in the session, hitting the highest level since August 2020. Gold recorded a gain of 4.2% last week, the biggest spike since July 2020.

Silver for May delivery slipped 7 cents to settle at $25.72 an ounce, after trading as high as $26.37 earlier in the session. May copper fell around 21 cents to $4.73 a pound on Monday. April platinum closed at $1,116.6 an ounce, while June palladium settled at $2,901.90 an ounce, after closing at a record high on Friday.

What to watch: Markets will keep an eye on the developments around the Russia-Ukraine crisis. US inflation data, due for release on Thursday, will also remain in focus.

The markets today

The Canadian dollar will be in focus today ahead of balance of trade report from the country

 

Context: The CAD/USD forex pair fell on Monday due to the strengthening of the US dollar and sharp volatility in crude oil prices.

Details: The price of oil, one of Canada’s major exports, jumped to its strongest level since 2008 on Monday. However, crude pared gains later in the session, after US and European allies said they were looking to ban Russia’s oil imports. US crude prices gained $3.72 to settle at $119.40 on Monday.

Global stock markets moved lower, while the greenback gained, as traders preferring safe-haven assets. The US dollar index, which measures the greenback’s performance versus a basket of major peers, settled higher at 99.29 on Monday.

The CAD/USD forex pair settled lower at $1.2821 on Monday. Canada’s government bond yields traded slightly higher, tracking gains in US Treasuries. The 10-year bond yield rose to 1.725%.

What to watch: Traders await economic data on balance of trade from Canada. The country had recorded a trade deficit of C$0.14 billion in December and is expected to report a trade surplus of C$1.6 billion in January. Exports from Canada are projected to increase to C$58.3 billion, from C$57.6 billion in December, while imports are expected to shrink to C$57 billion in January, from C$57.7 billion in the previous month.

The release of Canada’s employment data, due on Friday, will also remain in focus, as the jobs report reflects insights into the country’s economic strength.

Other Markets: European trading indices closed lower on Monday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 down by 0.40%, 1.98%, 1.31% and 1.10%, respectively.

Support & resistances for today

Technical Levels News Sentiment
USD/CAD – 1.2805 and 1.2814 Negative
AUD/USD – 0.7315 and 0.7336 Positive
Gold – 1991.50 and 1995.80 Positive
Silver – 25.687 and 25.779 Positive
Nikkei 225 – 24972.50 and 25121.00 Positive

 

Market snapshot

What else to watch today

Germany’s industrial production and current account, Spain’s industrial production, Italy’s retail sales, South Africa’s GDP growth rate and SACCI business confidence index, Eurozone’s GDP growth rate and employment change, US NFIB small business optimism index, balance of trade, exports, imports, Redbook index, IBD/TIPP economic optimism index and wholesale inventories, Brazil’s producer price inflation, car production, new vehicle registrations and net payrolls, Russia’s gross domestic product, as well as Spain’s consumer confidence indicator.


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