XAUUSD prices had an unusually volatile week as Russia-Ukraine headlines dominated the news flow. Gold in USD-term terms closed by -0.64% at 1890.10, but not before trading in a 5.2% range, reaching as high as 1976.50. This was the largest weekly price range for XAUUSD since the second week of August 2021.
This price action was balanced for the course: gold prices in EUR -terms (XAU/EUR) closed higher by +0.04%, but traded in a 6.5% price range; gold in GBP -terms finished up by +0.87%, but not before carving out a 6.3% price range; and perhaps most noteworthy, gold in RUB-terms (XAU/RUB) gained +7.6%, but gained as much as +17.1% at their highs.
Looking forward, investors will be watching the conflict deciding if it will intensify or worsen. If gold prices are going to run higher from this point, there needs to be a substantial escalation in the Russia-Ukraine conflict, ultimately drawing in the European Union, the United States, and more broadly, the NATO alliance. Then, in an economic environment defined by slowing growth among G7 countries and more hawkish central banks – which is pushing up real interest rates – gold prices are not well-suited to sustain a meaningful rally.
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