Gold - Record highs on the way?

Pullback may be brief

Gold came within a whisker of record highs on Tuesday and it may not be done there.

The yellow metal is a traditional safe haven and inflation hedge, which makes it perfect in highly uncertain times like this. Not only is the world already desperately trying to get to grips with high inflation, it's also facing the prospect of an economic slowdown and maybe even recession.

Putin's decision to invade Ukraine will have severe consequences, not just for Russia - although the sanctions imposed on it will be a hammer blow to the economy - but the rest of the world also, as commodity prices from oil and gas to palladium, nickel, and wheat sky-rocket. No country is insulated.

Gold's rally has been relentless, gaining more than 16% in a little over a month and it's hard to know when it will stop. In the absence of a ceasefire in Ukraine and withdrawal of Russian troops, the uncertainty around commodity prices and sanctions could see money continue to pile into it.

We have seen a bit of a pullback since falling just short of the highs and it saw some support around 2,022 (interestingly) around the top of the ascending channel on the 4-hour chart.

A move below here could see 2,000 tested which would be a major psychological test, not to mention the first test of yesterday's highs. A rebound off here would be a strong breakout confirmation and could propel it higher.