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he gold market continues to see significant volatility as Western nations react to the Russian invasion of Ukraine.
Safe-haven demand pushed gold prices up 2% at the start of the Asian trading session, kicking off the new week on a solid note. However, analysts note that the precious metal still faces strong momentum in the U.S. dollar as the world's dominant currency in this uncertain environment.
April gold futures last traded at $1,917.50 an ounce, up 1.5% on the day. Gold's solid start comes as U.S. equity markets see strong selling pressure with the S&P 500 opening the week down 2%.
Traders have a lot to catch up on as markets are just starting to react to the news over the weekend that NATO nations imposed further sanctions on Russia, kicking some banks out of the SWIFT global payments system.
Meanwhile, on Sunday, Russian President Vladimir Putin ordered his country's deterrence forces -- including nuclear arms -- onto their highest state of alert.
The U.S. and other Western nations are also sending military aid to Ukraine as Russian forces surround and draw closer to Ukrainian's capital city, Kyiv.
Analysts have said if tensions continue to escalate, gold prices could quickly push back to $2,000 an ounce.
David Madden, market analyst at Equiti Capital, said that in the current environment with so much geopolitical uncertainty, he could see prices pushing to new all-time highs in a few days.
Is gold price at risk of a bigger pullback after $100 swings?
However, some analysts have said that gold still faces a lot of headwinds and volatility is picking up. Last week as Russia invaded Ukraine, gold prices saw an intra-day swing of nearly $100.
Christopher Vecchio, senior market strategist at DailyFx.com, said in a note Sunday that Thursday's intra-day high could mark the peak for gold this year.
"The path for gold prices is clear from here: it's World War 3 or bust. If gold prices are going to run higher from this point, there needs to be a significant escalation in the Russia-Ukraine conflict, ultimately drawing in the European Union, the United States, and more broadly, the NATO alliance," he said in the note. "Otherwise, in an economic environment defined by slowing growth among G7 countries and more hawkish central banks – which is pushing up real interest rates – gold prices are not well-suited to sustain a meaningful rally."
By Neils Christensen
For Kitco News
Time to buy Gold and Silver on the dips
