Gold Price Forecast: XAU/USD rushes towards $1,950 amid shelling at Europe’s largest nuclear plant

• Gold price moves higher on a fresh wave of risk aversion amid shelling at Europe’s largest nuclear plant.
• The shelling at Europe’s largest nuclear plant by Russia will escalate the geopolitical tensions further.
• The risk-off impulse and Fed’s modest tightening policy are likely to firm the bulls ahead.

Gold (XAU/USD) is on an adrenaline rush to reclaim $1,950.00 as the Russian military has started shelling at Europe’s largest nuclear plant. This has brought a fresh wave in risk-aversion theme and investors have started diverting their funds in the precious metal.

The shelling at Europe’s largest nuclear plant is likely to bring more sanctions on Russia from the West leaders. Apart from that, European Union could retaliate by attacking the Russian military or by supporting Ukraine further with weaponry and financial aid.

One thing is unfolding from the ongoing Russia-Ukraine war that Russia is losing as the Ukrainian military is efficiently resisting the Russian military activities. The Ukrainian military is getting new Western weapons every day and has been barricading the Russian rebels from escalating their dominance.

Adding to that, the Russian economy is facing a downfall like a house of cards. Their economy has been crippled after the sanctions from the Western leaders. The Russian ruble has plunged around 50% in the last two weeks. The Russian equities have been removed from the global indices: MSCI and FTSE. Their economy has been isolated and its interest rates are roaring on the collapse of the SWIFT international banking system.

Apart from the risk-off impulse due to geopolitical tensions, the gold prices may rally further on a modest tightening stance by the Fed. Powell’s testimony has backed a 25 bps interest rate hike against the half a percent one to coincide with the Ukraine crisis and soaring inflation.

Meanwhile, the US dollar index (DXY) has slipped near 97.73 despite upbeat US Initial Jobless Claims on Thursday. Going forward, the US Nonfarm Payrolls from the Bureau of Labor Statistics will be the major event to keep under the radar, which is due on Friday.

Gold Technical Analysis

On a 15-minute scale, XAU/USD witnessed a strong upside move after the breakout of the symmetrical triangle. Later, it went into consolidation and showcased the formation of a rising channel. Now, the precious metal has violated the rising channel on the upside, and further gains cannot be ruled out. The Relative Strength Index (RSI) (14) has shifted above 60.00 after oscillating in a range of 40.00-60.00, which indicates a trigger for a fresh rally.

Gold 15-minute chart