XAU/USD is approaching $1,935 as a result of China’s commodity woes and Ukraine concerns

Gold (XAU/USD) re-establishes an intraday low around $1,942, down 0.45 percent on the day, as COVID-19 concerns about China add to the yellow metal’s recent weakness during Tuesday’s Asian session. Bears are also aided by mixed concerns about the Russia-Ukraine crisis, as well as higher US Treasury yields amid expectations of faster monetary policy tightening by the Federal Reserve (Fed) Nonetheless, the yellow metal began the trading week on a negative note, owing to a stronger US dollar and uncertainty over the Ukraine-Russia standoff.

Following the largest daily increase in covid infections, the latest virus numbers from China did not provide any relief. “Mainland China reported 3,602 new confirmed coronavirus cases on March 14, according to the national health authority on Tuesday, up from 1,437 the day before,” The dragon nation also declared a virus-induced lockdown in Langfang, a city near Beijing. Oleksiy Arestovych, an adviser to Ukraine President Volodymyr Zelenskyy’s office, was quoted by Sputnik as saying that a Moscow-Kyiv peace treaty could be reached as soon as two weeks or before late May. On the same vein, Ukraine President Zelenskyy recently stated that peace talks with Russia will resume on Tuesday, following an abrupt halt on Monday. However, reports of a Russian drone over Poland and sanctions imposed on Moscow, as well as Russia-Belarus refusal to pay for energy supplies in USD, cast doubt on the mood and weighed on gold prices.

Among these bets, the S&P 500 Futures pared an early Asian session gain, while US 10-year Treasury yields hovered near the highest levels since July 2019, around 2.14 percent at the time of publication. Moving on, geopolitical and commodity updates may entertain gold traders, with immediate focus on China’s Retail Sales and Industrial Production for February, which are expected to be 3.0 percent and 3.9 percent YoY, respectively, versus 1.7 percent and 4.3 percent in January. Following that, the US PPI and ECB President Lagarde’s speech will be closely monitored for new intraday cues.

Gold extends the previous day’s downside break of an ascending support line from early February, around $1,935, towards a convergence of the 21-DMA and 38.2 percent Fibonacci retracement of the September 2021 to March 2022 upside, around $1,935. The bearish bias is also supported by the most bearish MACD signals since the beginning of the month, as well as the downward-sloping RSI line. However, a clear downside break of $1,935 will quickly direct XAU/USD bears towards the $1,900 level. However, tops recorded in November 2021, around $1,877, may pose a challenge to metal sellers in the future. Recovery moves, on the other hand, must rise above the previous support line, which was around $1,952 at the time of publication. Nonetheless, the $2,000 and $2,050 levels may pose a challenge to gold buyers before directing them to the $2,070-75 range, which includes highs from late 2020 and this month.