Gold price pulls back from one-week high as usd buying resumes
Press Hub UCapital
Share:
Gold prices (XAU/USD) trade near $2,620 on Tuesday, retreating slightly from a one-week high amid renewed US Dollar (USD) dip-buying. Geopolitical tensions continue to drive safe-haven demand for Gold, but reduced expectations of aggressive Federal Reserve (Fed) rate cuts and a risk-on mood in global equities cap further gains.
Geopolitical risks support gold, but fed expectations limit upside
Geopolitical tensions remain a key driver for Gold, with haven flows fueled by ongoing conflicts in Ukraine and the Middle East. US President Joe Biden's authorization for Ukraine to use long-range missiles against Russia added to Monday’s bullish momentum, helping Gold sustain a second consecutive day of gains.
However, reduced bets on aggressive Fed rate cuts act as a headwind. Investors expect President-elect Donald Trump's expansionary fiscal policies, including lower taxes and higher tariffs, to stoke inflation and limit the Fed’s ability to ease monetary policy. Elevated US Treasury yields and a broadly resilient USD further constrain the yellow metal’s upside.
Technical outlook: key levels to watch
Resistance Levels:
Gold faces immediate resistance near $2,634-2,635, coinciding with the 38.2% Fibonacci retracement level. A sustained break above this could pave the way for a rally toward $2,655-2,657 and ultimately to the $2,664-2,665 zone.
Support Levels:
The $2,600 mark aligns with the 23.6% Fibonacci level and acts as key immediate support. A break below this level could expose the $2,569-2,568 region, followed by the 100-day SMA near $2,550. Further declines could test last week’s swing low of $2,536, with a fall toward the $2,500 psychological mark signaling increased bearish momentum.
Gold prices remain supported by geopolitical risks, but headwinds from a strong USD and elevated US Treasury yields limit upward momentum. Traders should watch the $2,600 support and $2,635 resistance levels for directional cues, while Fed commentary and US economic data later this week could provide additional clarity on the metal’s outlook.
Geopolitical risks support gold, but fed expectations limit upside
Geopolitical tensions remain a key driver for Gold, with haven flows fueled by ongoing conflicts in Ukraine and the Middle East. US President Joe Biden's authorization for Ukraine to use long-range missiles against Russia added to Monday’s bullish momentum, helping Gold sustain a second consecutive day of gains.
However, reduced bets on aggressive Fed rate cuts act as a headwind. Investors expect President-elect Donald Trump's expansionary fiscal policies, including lower taxes and higher tariffs, to stoke inflation and limit the Fed’s ability to ease monetary policy. Elevated US Treasury yields and a broadly resilient USD further constrain the yellow metal’s upside.
Technical outlook: key levels to watch
Resistance Levels:
Gold faces immediate resistance near $2,634-2,635, coinciding with the 38.2% Fibonacci retracement level. A sustained break above this could pave the way for a rally toward $2,655-2,657 and ultimately to the $2,664-2,665 zone.
Support Levels:
The $2,600 mark aligns with the 23.6% Fibonacci level and acts as key immediate support. A break below this level could expose the $2,569-2,568 region, followed by the 100-day SMA near $2,550. Further declines could test last week’s swing low of $2,536, with a fall toward the $2,500 psychological mark signaling increased bearish momentum.
Gold prices remain supported by geopolitical risks, but headwinds from a strong USD and elevated US Treasury yields limit upward momentum. Traders should watch the $2,600 support and $2,635 resistance levels for directional cues, while Fed commentary and US economic data later this week could provide additional clarity on the metal’s outlook.