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Price of gold moves toward $2000 as US announces new sanctions on Russia

The price of gold has witnessed a strong upside and risen to a fresh high after the US announced the prohibition of gold transactions with Russia.

Source: Bloomberg

Gold has became the latest weapon that the U.S. picked up to target Russia’s economy. The global eyes are looking to the meeting between U.S. President Joe Biden and European leaders in Brussels this Thursday. A new round of international restrictions is believed to be on top of the agenda which may see plans for more sanctions in reaction to Russia’s month-long war on Ukraine.

President Biden has issued a notice to confirm that gold transactions with Russia are now prohibited, and the gold market must stop dealing with sanctioned Russian entities. The abrupt move comes from the prediction that Russia could shore up the ruble by selling their gold stock.

Following the news, gold rose to a fresh high in nearly two weeks and stood firmly above the $1950 per ounce.

Gold price technical analysis

From a technical view, the price of the precious metal has witnessed a strong upside after violating the downward trend line early this week. The price of gold has shown strong determination to conquer the 20-days moving average, which if broken through, should put the $1988 level in view.

The weekly chart shows that the months-long ascending trend line remains valid despite of the panic sell-off early this month, which adds to the upside filters from a long-term perspective.

The Relative Strength Index (RSI) is oscillating in the 40-60 range, suggesting the continuation of a bullish trend before reaching overbought territory.

Gold price daily chart

Gold price daily chart Source: IG

Gold price weekly chart

Gold price Weekly Chart Source: IG

Follow Hebe Chen on Twitter @BifeiChen

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