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February 18, 2022

Will The Gold Rush Continue? What You Should Know

Frank Cabibi

International conflict has investors flocking to the war-hedging metal which recently touched the $1,900 mark for the first time since June of last year. Russian troops have gathered at the borders between them and Ukraine and have yet to ease off. A big question now is whether the gold rush will continue or not, and that all depends on what happens next. Price is down -0.5% on the day at the time of writing this.

How The Gold Rush Can Persist

The factor that can move this precious metal higher is the inverse reason for the stock market: the anticipation of a Russian invasion. If tensions persist, so does the upside for gold.

Another factor that can help gold is COT data. Today, we will see a more updated report on non-commercial position change in futures contracts. Last week's report showed us a huge decrease in short positions as well as increased buying on the long side.

However, retail is ready to catch a pullback as short sentiment is overwhelmingly bearish. Some analysts expect the metal to hit as high as $2000 before any kind of pullback, but I am not confident in that move. I do believe we can see some more gains within the next week or so, but another $100 move seems unlikely. We are also nearing the heavily anticipated interest rate hike from the Fed which will only hurt gold.

Trade Setups

the gold rush

Gold hits a massive run to the upside after tensions on the Russian-Ukraine border escalate. The pair did end up touching the $1900s and looks like the move could continue if tensions don't ease. $1917 is the next big resistance level which could serve as the top before we see a pullback to the $1800s. But, a break above this level could lead to a move to $1958.

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