Gold has been consolidating around $1800 for more than a year but there's a series of higher lows that's been building since the start of 2021 and now it's threatening to break out of the long-term wedge.
It's way too early to say today's $35 rally and push through the top is a breakout but it's worth keeping a close eye on.
My inclination isn't necessarily to be long gold on a Russian invasion of Ukraine. If Russia is hit by harsh sanctions, it could have to dip into its enormous gold reserves to prop up its currency. So I'm certainly cautious on that angle.
The flip side is that if oil and gas prices spike, it will be a brutal shock to inflation expectations in the US and Europe, meaning that rates could run agressively higher and bonds could crumble. That leaves gold as a safe haven.
