Gold Price Holds Near $2,700 Amid Geopolitical Tensions
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The price of gold (XAU/USD) continues its upward trend, recently reaching a nearly two-week high near $2,700. This rally is primarily driven by ongoing geopolitical instability and inflationary concerns linked to the expansionary policies of the incoming U.S. administration.
The Russia-Ukraine conflict remains a significant driver of haven flows, with recent events, including Russia’s intermediate-range ballistic missile launch, escalating fears in the market. These tensions have pushed investors to seek the safety of assets like gold.
Meanwhile, the U.S. Dollar Index (DXY) has risen to its highest level since October 2023, bolstered by expectations of a less dovish Federal Reserve. Typically, a stronger dollar would weigh on gold, but the metal has remained resilient, reflecting continued demand amid broader economic uncertainties.
Though inflationary pressures have cooled somewhat, concerns over future inflation shocks persist. Several Federal Reserve officials, including Chair Jerome Powell, have indicated caution when it comes to further easing monetary policy. The CME Group FedWatch Tool shows a 55% probability of a 25-basis-point rate cut in December, highlighting mixed market sentiment.
Technical Analysis: Gold Poised for Further Gains Above $2,700
Gold's technical outlook remains bullish, especially after the recent breach of the $2,665 level, which coincides with the 50% Fibonacci retracement and the 100-period SMA on the 4-hour chart. This breakout sets the stage for further gains, with $2,700 as the immediate target. A decisive close above this level could pave the way toward the $2,710-$2,711 supply zone. If the bullish momentum continues, the next resistance level lies at $2,736-$2,737. On the downside, the $2,665 zone now serves as immediate support. Below this level, the $2,635-$2,634 region and the $2,622-$2,620 zone provide intermediate support. If gold falls below the $2,600 mark, it could face deeper corrections, with the 100-day SMA at $2,560 offering a key support level.
Outlook: Bullish Sentiment Remains Intact Despite potential headwinds, including a stronger dollar and mixed Fed expectations, the overall bullish sentiment surrounding gold remains intact. Geopolitical risks and rising inflation concerns continue to support demand for the precious metal. While technical indicators point to further upside potential, market participants will closely monitor upcoming U.S. flash PMI data and other economic cues to confirm sustained momentum. A clear break above $2,700 could solidify the positive outlook, while failure to hold above $2,665 could signal a short-term pullback
The Russia-Ukraine conflict remains a significant driver of haven flows, with recent events, including Russia’s intermediate-range ballistic missile launch, escalating fears in the market. These tensions have pushed investors to seek the safety of assets like gold.
Meanwhile, the U.S. Dollar Index (DXY) has risen to its highest level since October 2023, bolstered by expectations of a less dovish Federal Reserve. Typically, a stronger dollar would weigh on gold, but the metal has remained resilient, reflecting continued demand amid broader economic uncertainties.
Though inflationary pressures have cooled somewhat, concerns over future inflation shocks persist. Several Federal Reserve officials, including Chair Jerome Powell, have indicated caution when it comes to further easing monetary policy. The CME Group FedWatch Tool shows a 55% probability of a 25-basis-point rate cut in December, highlighting mixed market sentiment.
Technical Analysis: Gold Poised for Further Gains Above $2,700
Gold's technical outlook remains bullish, especially after the recent breach of the $2,665 level, which coincides with the 50% Fibonacci retracement and the 100-period SMA on the 4-hour chart. This breakout sets the stage for further gains, with $2,700 as the immediate target. A decisive close above this level could pave the way toward the $2,710-$2,711 supply zone. If the bullish momentum continues, the next resistance level lies at $2,736-$2,737. On the downside, the $2,665 zone now serves as immediate support. Below this level, the $2,635-$2,634 region and the $2,622-$2,620 zone provide intermediate support. If gold falls below the $2,600 mark, it could face deeper corrections, with the 100-day SMA at $2,560 offering a key support level.
Outlook: Bullish Sentiment Remains Intact Despite potential headwinds, including a stronger dollar and mixed Fed expectations, the overall bullish sentiment surrounding gold remains intact. Geopolitical risks and rising inflation concerns continue to support demand for the precious metal. While technical indicators point to further upside potential, market participants will closely monitor upcoming U.S. flash PMI data and other economic cues to confirm sustained momentum. A clear break above $2,700 could solidify the positive outlook, while failure to hold above $2,665 could signal a short-term pullback