GOLD AND SILVER PRICES JUMP AS UKRAINIAN RISKS RISE

Gold has become a winner amid escalating tensions between western countries and Russia. Investors have rushed to safe havens like gold, pushing its price to the highest level since June last year. Gold has risen in 13 of the past 15 sessions and from this year’s low of $1,780 to $1,900. Analysts expect that gold could keep rising in the coming months if tensions rise. During the weekend, tensions on Ukraine kept rising as more Russian military officials continued moving closer to the Ukrainian border. Other metals like silver, platinum, and palladium have also been in an upward trend.

The euro declined on Monday morning as traders waited for key economic data from Europe. In Germany, the statistics agency will publish the latest producer price index (PPI) data. The PPI is expected to show that the PPI rose to 1.5% in January leading to a year-on-year gain of 24.2%. That will be the highest increase since the data was collected. Later, Markit will publish the flash manufacturing and services PMI numbers from Germany, France, and the European Union. Economists expect the data to show that business activity in Europe continued to do well in February as countries reopened.

The market activity will be a bit muted today since the US markets will be closed for the President’s Day holiday. Therefore, the key driver will be the tensions about Ukraine. During the weekend, President Biden warned that Putin had decided to invade Russia. Similarly, Boris Johnson warned that an attack would likely provoke one of the biggest conflicts in Europe. Another key thing to watch will be the latest interest rate decision by the Chinese central bank.

EURUSD

The EURUSD pair declined to a low of 1.1320, which was lower than last week’s high of 1.1400. On the four-hour chart, the pair has moved below the 25-day and 50-day moving averages while the Chaikin Oscillator has moved to the lowest level since January 26. It has also moved above the 50% Fibonacci retracement level. Therefore, the pair will likely keep falling as bears target the key support at 1.1280.

XAUUSD

The XAUUSD pair maintained its bullish trend as investors rushed to safe havens. It is trading at 1,897, which is a few points below last week’s high of 1,900. The pair is slightly above the key level at 1,877. It also moved above the short term and long-term moving averages while the Relative Strength Index is comfortably above the overbought level. Therefore, the pair will likely keep rising this week.

GBPUSD

The GBPUSD pair declined slightly ahead of the latest flash PMI numbers from the UK. It is trading at 1.3582, which is lower than last week’s high of 1.3645. On the four-hour chart, the pair moved slightly below the 23.6% Fibonacci retracement level. The MACD has also formed a bearish divergence pattern. Therefore, the pair will likely keep falling, with the next key support being at 1.3550.