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Gold Losing Its Shine As "Safe Haven"

Gold declined and lost some of its demand as safe haven as the geopolitical crisis in Ukraine eases. Russia’s Central Bank hiked interest rates from 5.5% to 7% on Monday after the rouble fell to record lows against euro and dollar and fears sparked demand for safe-haven gold position. Gold has always been accepted as an attractive hedge to softening paper currencies. Thus it gained even after the strong economic data from US. However today it is reported that Russian President Vladimir Putin had ordered his troops to return to base by March 7. Although the crisis has been encouraging traders to buy gold, the physical demand from China will continue to be a driver of prices as China alone is absorbing the half of the world’s gold mine production.

On the hourly chart the possible support levels the pair may face can be observed.