• Gold hit fresh multi-month highs near the $1910 on Monday but has since dropped back under the $1900 handle.
• Geopolitics remains the wildcard that could stoke surprise volatility in either a bullish or bearish direction.

Spot gold (XAU/USD) prices hit fresh multi-month highs near the $1910 on Monday during Asia Pacific session, but have again failed to hold to the north of the $1900 handle. In recent trade, the precious metal has been caught going sideways in the mid-$1890s, with the prospect for a fresh push higher again on Monday limited by the lack of market volumes stateside. US markets are shut on Monday for President’s Day so it is likely to be a very quiet US session.

Geopolitics remains the wildcard that could stoke surprise volatility in either a bullish or bearish direction. The Russian rouble has been coming under significant pressure on Monday, indicative of rising fears of a Russian invasion/military incursion into Ukraine that would trigger a round of sanctions from Western countries on Moscow. Violence between pro-Russia separatists and Ukraine’s military in the contested Donbas region has continued on Monday, the former group upping the inflammatory rhetoric in accusing Ukraine’s military of shelling and planning a full-scale assault.

This is keeping gold underpinned close to recent highs. At current levels in the mid-$1890s, the precious metal trades close to flat on the day and only about 0.75% below earlier session highs. One bearish risk to note for gold is whether a summit between Russian President Vladimir Putin and US President Joe Biden goes ahead this week following recent chatter. The meeting could be a good opportunity to ease tensions somewhat. Otherwise, US data and Fed speak will be worth watching, but will, for the most part, play second fiddle to the Ukraine crisis.