Gold has been one of the bigger beneficiaries in this whole Russia-Ukraine episode but as risk fortunes start to turn, we're not seeing a material unwind in gold just yet. I mean, it may still a bit early so there's nothing wrong with that.
But often times, markets tend to act first and then work out the details later.
The situation as it stands is that Russia has came out to get what they wanted but it remains to be seen if Putin wants to push for more. That could be the real motive but for now, markets are turning the other cheek. And with 'slap on the wrist' sanctions being applied, there isn't any major economic consequences to be worried about. As such, we may very well de-escalate from here or we could see Russia throw a curveball and start more conflict.
Given how the market is reacting today, the former looks to be what investors are leaning towards at the moment.
As for gold, I reckon it could be a bit of a bitter pill for gold bugs to swallow once the shoe drops. Price ran into resistance from the May to June highs last year above $1,900 and the technical level is holding. That is a good place for sellers to lean on to look for gold to retrace gains as Russia-Ukraine tensions subside.
From a fundamental picture, gold is having to deal with the prospect of rising rates as central banks around the world continue to look to tighten policy in the months ahead. That's not exactly too bright an outlook - as evident by gold's struggle in January, which has seasonally been the best month for the yellow metal historically.