The only factor in Ukrainian non-gold market

Gold prices made a notable move on Monday, May 12th, breaking above the key $1,300 per ounce level amid heightened geopolitical tensions. Despite some short-term volatility, the price has since held firm above this critical threshold, signaling strong underlying support for the precious metal.

James Steel, a senior analyst at a major bank specializing in precious metals, explained that the recent rally is not solely driven by the situation in Ukraine. “There are multiple factors at play,” he said. “Regional conflicts, including those in the Eurozone, have contributed to a broader sense of uncertainty, which is boosting demand for gold as a safe-haven asset.”

The situation in Ukraine escalated further when the Donetsk and Lugansk regions declared themselves as independent states following a controversial referendum. This development has added fuel to the ongoing conflict and increased investor concerns about regional instability, further supporting gold’s appeal.

Steel also pointed to growing physical demand in Asia, particularly from countries like India and China, where gold remains a popular investment and store of value. He noted that this trend is beginning to show more clarity and could continue to provide long-term support for the market.

Meanwhile, a New York-based trader highlighted the technical aspects behind the recent price movement. “Gold opened lower on Monday, hitting levels consistent with a long-term downward trend line,” the trader said. “But instead of continuing to fall, the price stabilized around that level, suggesting that traders were covering short positions.”

“Once the price moved above $1,295 per ounce, we saw increased buying activity,” the trader added. “This could signal a potential reversal after the December low, as the market appears to be finding support between $1,275 and $1,285 an ounce.”

With global uncertainties persisting and fundamental factors supporting the bullion, gold may continue to attract attention from both institutional and retail investors in the coming weeks.