EUR/GBP falls following the release of UK inflation data. Gold rises with Russia, FOMC minutes in focus.

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Gold rises with Russia, Fed minutes in focus

Gold prices slipped lower yesterday as risk sentiment improved following the pullback of some Russian troops from the border with Ukraine.

Whilst there is some optimism that diplomacy could still resolve the Russia Ukraine conflict – the mood in the market remains cautious. Comments by Biden overnight that Russia could still invade highlight how fragile the situation is,  helping to underpin gold.

Attention now shifts to US retail sales & FOMC minutes. The minutes could confirm the Fed’s more hawkish stance. Whilst the meeting itself brought no surprises, Fed Chair Powell said afterward that he was open to hiking rates at every meeting this year.

It's worth considering that the Fed meeting was before inflation data showed a 7.5% increase and before the stellar jobs report, so could be less hawkish than feared. In this case, Gold could rise as the USD falls lower.

Where next for Gold?

Yesterday’s sell-off saw Gold fall to 1842 the January 19 high. The price has rebounded off this level. The move above resistance at 1853 and the bullish RSI are keeping buyers hopeful of further upside.

Resistance can be seen at 1880 2022 high. A move above here, a double top would be significant.

Support can be seen at 1843 with a move below here negating the recent uptrend and opening the door to support around 1820.

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