Gold looks set to finish the third consecutive week with solid gains, driven north by geopolitical tensions this month. The precious metal keeps attracting investors looking for safe-haven assets against the backdrop of the escalating Ukraine crisis. According to the latest reports, United States Secretary of State Antony Blinken has accepted an invitation to meet with Russia's Foreign Minister Sergey Lavrov.
The meeting is expected to take place next week. Russia has reaffirmed that troops are leaving Ukraine’s borders following military drills, adding to positive news. The headlines helped somehow ease market worries, but buyers stayed cautious anyway, refraining from more decisive actions, especially as Kremlin noted that the situation in Donbas is potentially dangerous and the latest news from the region is alarming.
As such, gold prices briefly exceeded the $1,900 psychological level for the first time since June 2021 before retreating marginally amid some profit-taking. However, the latest headlines on Donbas pushed the yellow metal closer to the upper end of the extended trading range.
The current dynamics suggest gold prices will stay volatile as long as the Russia-Ukraine conflict remains in the market focus. In the immediate term, the XAU/USD pair needs to confirm a break above the $1,900 handle on a daily closing basis. However, it looks like the bullion will stay below this barrier at this point as risk sentiment is neutral now, and the metal is rather attractive for profit-taking, especially ahead of the weekend.
Next week, gold prices could register fresh multi-month highs without significant progress towards resolving the geopolitical crisis.