Amid growing geopolitical threats, the price of gold maintains its optimistic leaning close to its one-week high
Gold prices (XAU/USD) maintain a bullish momentum as the European session begins, hovering around $2,660, a one-and-a-half-week high reached earlier on Thursday. This marks the fourth consecutive day of gains, driven primarily by safe-haven demand fueled by escalating geopolitical tensions from the Russia-Ukraine conflict. Additionally, a slight decline in the US Dollar (USD) provides further support for the precious metal.
However, upside movement in Gold remains limited due to rising US Treasury bond yields, which are underpinned by expectations that President-elect Donald Trump's proposed tariffs could stoke inflation and restrict the Federal Reserve's ability to lower interest rates. Moreover, the prevailing risk-on sentiment, as evidenced by the positive tone in equity markets, advises caution against adopting an overly bullish stance on XAU/USD.
Potential Upside Targets: $2,670-$2,672 Resistance Zone
From a technical standpoint, Gold's upward trajectory faces initial resistance near the $2,660 level, which aligns with the 50% Fibonacci retracement of the recent decline from October’s all-time high. A sustained move above this hurdle could propel XAU/USD toward the $2,670-$2,672 range. Continued buying interest might even push the price toward the $2,700 psychological level.
Key Support Levels to Watch: $2,635-$2,600 Zone
On the downside, immediate support is seen around $2,635-$2,634, corresponding to the 38.2% Fibonacci retracement level. Below this, the $2,622-$2,620 region and the $2,600 round figure emerge as critical defense zones for the bulls. A decisive break below $2,600 could expose XAU/USD to further losses, targeting the 100-day Simple Moving Average (SMA) near $2,557. Intermediate support at $2,570 and last week’s swing low around $2,537-$2,536 could provide additional relief, though a breach of these levels would signal renewed bearish momentum and open the door for deeper declines.
Paraphrasing text from "FX Street" all rights reserved by the original author.
