Fears of an imminent Russian invasion of Ukraine helped to drive April gold futures to a high of exactly $1900.00 this morning, bringing the weekly chart to the brink of a confirmed breakout:
Gold (Weekly)
Using stage analysis we can deduce that gold is on the brink of transitioning from a stage 1 bottoming process to a stage 2 uptrend. A weekly close above $1880 (November 2021 high) would offer strong evidence that gold is transitioning from stage 1 to stage 2.
As a veteran gold market observer/participant I am always skeptical of gold advances that appear to be driven by geopolitical concerns. While there may be a "Russia premium" in today's $1897 gold price, the recent uptrend in gold is largely driven by macroeconomic factors including the specter of negative real interest rates for a long time to come. Moreover, Russia and China are making strides in promoting the 'de-dollarization' of global trade, a push that clearly benefits gold as a timeless store of value that is held in large quantities by global central banks.
The strength of the recent price action, the shallowness of the dips, and the strong leadership from gold mining shares including senior gold producers like Barrick Gold (NYSE:GOLD, TSX:ABX), helps to add validity that this gold move is the real deal:
Barrick Gold (Daily)
From a sentiment standpoint, gold does not seem overheated yet. In fact, the great Jim Cramer recently stated that he prefers cryptocurrencies to gold as a 'hedge'. That probably means there's further room to run before we get a significant correction in gold.