Gold May Be on a Verge of Major Breakout

Gold futures are on their way to return to historic highs since early 2021 and posted their biggest daily rally in about two years, as Russia-Ukraine conflict spurred demand for rock-solid safe havens.

Front-month April Comex gold (XAUUSD) futures added yesterday 2.8% at $1,964.60/oz., the highest for a most-active contract settlement since January 2021, while March silver (XAGUSD) added 3.3% at $25.36/oz. The surge in gold and other precious metals comes even as the dollar jumped 1%, as measured by the ICE U.S. Dollar Index.

Gold has been trending up in recent weeks on geopolitical and inflationary uncertainties, helping offset other headwinds like the U.S. Federal Reserve’s policy tightening, which was expected to weigh on the metal. Precious metals have been profoundly overshadowed during 2021 by the rapid price growth of many cryptocurrencies, which are referred to as “digital gold” by some analysts. But now, judging by the technical picture, they may be ready for a major price rally – especially, if the cryptos will remain muted for any reason.

Some major investment powerhouses including UBS have recently issued analytical reports dedicated to the 2022 gold price forecast. In the near term, gold could approach the record high of ~$2,075/oz recorded in 2020 if the conflict in Ukraine intensifies and sends ripples across entire Europe.

There are many ETFs available to get exposure to precious metals including GLD, IAU, NUGT, PHYS, GDX, SLV, SIL, SIVR, PSLV. In addition, gold miners will likely be in focus as well - probably, with some time lag, such as Barrick Gold (GOLD), Newmont Mining (NEM), AngloGold Ashanti (AU), Yamana Gold (AUY), Kinross Gold (KGC), New Gold (NGD), B2Gold (BTG) and some other names.