Amid global tensions and trade war anxiety, the price of gold regains some of its early losses

Gold price (XAU/USD) recovers from an intraday dip near the $2,620 level and climbs toward the upper end of its daily range during the European session on Thursday. Concerns over US President-elect Donald Trump's proposed tariffs and ongoing geopolitical tensions, particularly the escalating Russia-Ukraine conflict, continue to bolster demand for the safe-haven metal. Additionally, market expectations of another Federal Reserve (Fed) rate cut in December further support the non-yielding yellow metal.

However, Wednesday's US macroeconomic data indicated a robust economy and limited progress on inflation, suggesting the Fed might approach further monetary easing with caution. This, coupled with a slight rebound in US Treasury yields, has helped the US Dollar (USD) recover some of the prior day's losses, limiting Gold's upward momentum. Consequently, traders may wait for a decisive breakout to gauge whether the recent recovery from the $2,600 psychological level will sustain.

Gold Price Must Clear 100-Period EMA on 4-Hour Chart for Bulls to Dominate
Gold's inability to maintain a position above the 100-period Exponential Moving Average (EMA) on the 4-hour chart and its subsequent pullback signal caution for bullish traders. Moreover, negative signals from oscillators on hourly and daily charts imply a bearish bias in the near term. A clear and sustained break below the $2,600 level could open the door for further losses. In this scenario, XAU/USD might target the 100-day Simple Moving Average (SMA), situated around $2,571-$2,570, before potentially falling toward the monthly low near $2,537-$2,536.

Conversely, a move beyond the Asian session high of $2,638-$2,639 would likely encounter resistance near the overnight peak around $2,658. Sustained strength beyond this level could propel Gold toward the next key resistance at $2,677-$2,678, with the $2,700 psychological mark as the next significant target. A continued rally past this level would indicate that the recent correction from October's all-time high has concluded, shifting the bias in favor of bullish momentum.

Paraphrasing text from "FX Streets" all rights reserved by the original author.