GOLD AND OTHER HAVENS RETREAT AMID RUSSIA AND UKRAINE NEGOTIATIONS

The price of crude oil retreated while the Russian ruble rose as Russian and Ukrainian officials met for the fourth round of talks. The other rounds of talks have failed to reach an agreement while Russia has continued shelling Ukrainian cities. On Sunday, Russia even attacked a military base near the Polish border. Oil prices also declined after the US rebuffed Russian requests on sanctions during the negotiations on Iran. Moscow wanted its trade relations with Iran to be excluded from the current sanctions. In a statement, the State Department said that it had no intention of offering Russia anything new as it relates to the sanctions.

Gold prices retreated on Monday as investors waited for the outcome of the meeting between Russian and Ukrainian officials. In the past few weeks, gold has emerged as a favorite asset among investors, pushing it above $2,000. Investors believe that the crisis in Russia will lead to more de-dollarization by many central banks. For one, as part of their response measures, western countries have put sanctions on Russia’s central bank, denying it the resources it needs to stabilize its currency. Other metals that have risen sharply recently like copper and palladium have also retreated.

The economic calendar was relatively muted today. The only important data was Swedish inflation numbers. According to the country’s statistics agency, the headline CPI rose to 4.3% while CPI at constant interest rates rose to 4.5%. India also published the latest trade numbers. Later this week, investors will focus on key central bank decisions from the United States, UK, and Japan. Also, there will be some key corporate earnings from software companies like Gitlab and SmartSheet.

EURUSD

The EURUSD pair was little changed on Monday as investors prepared for the upcoming Fed decision. It is trading at 1.0951, where it has been in the past few days. The pair has moved slightly below the 23.6% Fibonacci retracement level. It has also moved slightly below the 25-day and 50-day moving averages while the Relative Strength Index and MACD moved to the neutral level. Therefore, the pair will likely remain in this range today.

XAUUSD

The XAUUSD pair continued the downward trend it started last week as negotiations between Ukraine and Russia continued. It is trading at 1,963, which is lower than the year-to-date high of 2,072. On the four-hour chart, the pair has moved below the 25-day moving average while the Relative Strength Index has moved below the overbought level. The pair will likely keep falling although a rebound will likely happen later this week.

USDJPY

The USDJPY pair continued its bullish trend ahead of this week’s BOJ and Fed decisions. On the four-hour chart, the pair has risen above the short and longer term moving averages while oscillators have moved above the overbought level. Therefore, while the bullish trend will likely continue, a short pullback cannot be ruled out.