Gold stays bullish amid geopolitical tensions and high Treasury yields
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Gold price (xau/usd) sustains its upward movement, trading near $2,660 during thursday's european session, marking a fresh one-and-a-half-week high. this marks the fourth consecutive session of gains, driven by geopolitical risks and a temporary pullback in the us dollar (usd). the rally, however, faces resistance as elevated us treasury yields and a broader risk-on sentiment cap further upside.
Fundamental drivers
Geopolitical tensions support safe-haven demand
The russia-ukraine conflict continues to escalate, with russian president vladimir putin’s updated nuclear doctrine heightening concerns. ukrainian strikes on russian military infrastructure have amplified fears of prolonged instability, boosting safe-haven inflows into gold.
Us monetary policy expectations
Investors are pricing in slower fed rate cuts, influenced by president-elect trump’s proposed expansionary fiscal policies, which may intensify inflationary pressures. recent fed commentary, including remarks from lisa cook and michelle bowman, underscores a cautious approach to further rate cuts, keeping 10-year us treasury yields elevated and limiting gold’s gains.
Us dollar dynamics
The us dollar index (dxy) holds steady near the 106.50 level after a brief pullback, reflecting cautious optimism. the subdued usd allows for near-term bullish momentum in gold, although sustained dollar strength may act as a headwind.
Technical analysis
Resistance levels
Immediate resistance is at $2,660, aligned with the 50% fibonacci retracement of the october correction. a sustained break above could target the $2,670-2,672 congestion zone. further upward momentum may lead to a test of the $2,700 psychological barrier, a critical level for validating longer-term bullish scenarios.
Support levels
Initial support lies at $2,635-2,634, corresponding to the 38.2% fibonacci retracement level. a breach below $2,620 could expose the $2,600 round figure, a pivotal support level. deeper losses would target the 100-day simple moving average (sma) at approximately $2,557, followed by a retest of last week’s swing low near $2,537-2,536. momentum indicators
Relative strength index (rsi): hovering in neutral territory, suggesting room for further upside without immediate overbought conditions. macd: recovering from bearish divergence, indicating renewed bullish momentum in the short term. outlook
While geopolitical tensions provide a solid foundation for gold’s upward movement, persistent elevated us treasury yields and a mixed risk appetite could limit upside potential. thursday’s us economic data and fed commentary will likely influence gold’s near-term trajectory, with the focus on validating the $2,660 breakout or testing lower support levels. the broader bias remains cautiously bullish, contingent on geopolitical developments and usd performance.
Fundamental drivers
Geopolitical tensions support safe-haven demand
The russia-ukraine conflict continues to escalate, with russian president vladimir putin’s updated nuclear doctrine heightening concerns. ukrainian strikes on russian military infrastructure have amplified fears of prolonged instability, boosting safe-haven inflows into gold.
Us monetary policy expectations
Investors are pricing in slower fed rate cuts, influenced by president-elect trump’s proposed expansionary fiscal policies, which may intensify inflationary pressures. recent fed commentary, including remarks from lisa cook and michelle bowman, underscores a cautious approach to further rate cuts, keeping 10-year us treasury yields elevated and limiting gold’s gains.
Us dollar dynamics
The us dollar index (dxy) holds steady near the 106.50 level after a brief pullback, reflecting cautious optimism. the subdued usd allows for near-term bullish momentum in gold, although sustained dollar strength may act as a headwind.
Technical analysis
Resistance levels
Immediate resistance is at $2,660, aligned with the 50% fibonacci retracement of the october correction. a sustained break above could target the $2,670-2,672 congestion zone. further upward momentum may lead to a test of the $2,700 psychological barrier, a critical level for validating longer-term bullish scenarios.
Support levels
Initial support lies at $2,635-2,634, corresponding to the 38.2% fibonacci retracement level. a breach below $2,620 could expose the $2,600 round figure, a pivotal support level. deeper losses would target the 100-day simple moving average (sma) at approximately $2,557, followed by a retest of last week’s swing low near $2,537-2,536. momentum indicators
Relative strength index (rsi): hovering in neutral territory, suggesting room for further upside without immediate overbought conditions. macd: recovering from bearish divergence, indicating renewed bullish momentum in the short term. outlook
While geopolitical tensions provide a solid foundation for gold’s upward movement, persistent elevated us treasury yields and a mixed risk appetite could limit upside potential. thursday’s us economic data and fed commentary will likely influence gold’s near-term trajectory, with the focus on validating the $2,660 breakout or testing lower support levels. the broader bias remains cautiously bullish, contingent on geopolitical developments and usd performance.