Gold D1 09-03

Risk trades are rallying in European morning trade as markets are somehow feeling less worried about the Russia-Ukraine situation. It's just pure volatility in my view as the war isn't over and headline risks are still paramount.

But we are seeing gold be dragged lower after having tested the August 2020 highs around $2,069-75 this week. The 2% drop today sees gold fall back to $2,010 with the $2,000 mark being an important level for buyers to keep above.

I mentioned this earlier:

"At this stage, there's only two possible real key developments that markets really care about. The first being that Russia steps up its aggression and takes over Kyiv. The second being that peace is brokered between the two sides."

That is also going to be the ultimate driver for where things will go next for gold.

For now, there is an argument that we are seeing a stall near the technical top from the August 2020 highs. But keep above $2,000 and if Russia-Ukraine tensions continue to persist, then the gold rally could still find more legs.

Another important detail to be mindful about is Russia's response in cutting exports. Russian gold exports account for 9% share of global production, so that's an vital piece of information to keep close in the days ahead.