gold prices rose on Friday as concerns over trade disputes and geopolitical tensions heightened demand for safe-haven assets. During the Asian trading session, the price of gold (XAU/USD) reached its highest point in four days, around $2,662 to $2,663. This uptick can be attributed to fears stemming from ongoing geopolitical risks, including the Russia-Ukraine conflict and the potential for further tariffs from the United States.
The U.S. dollar (USD) is currently trading near a two-week low, adding further support to gold prices. The likelihood of the Federal Reserve cutting interest rates again in December fuels this downward pressure on the dollar. However, recent data from the U.S. Personal Consumption Expenditure (PCE) Price Index indicates that inflation improvements may be stalling, suggesting that the Fed could slow its rate-cutting strategy. This scenario could position the dollar for a rebound, dampening gold ’s upward momentum.
gold continues to attract investment as a safe-haven asset amidst uncertainty surrounding trade policies introduced by the incoming U.S. administration. Proposals for tariffs targeting imports from countries such as Canada, Mexico, and China could escalate into broader trade conflicts, further motivating investors to seek refuge in gold . Additionally, threats from Russia regarding military actions in Ukraine are contributing to increased demand for gold as a protective measure.
Technical analysis indicates that a breakout above the $2,649 to $2,650 range — factoring in the 100-hour Simple Moving Average and the 38.2% Fibonacci retracement level — signals a bullish trend. Despite this, the gold price faces resistance near the $2,663 to $2,664 level, aligned with the 50% Fibonacci retracement level. Should it overcome this hurdle, there is potential for the price to reach $2,677 or higher.
Conversely, a drop below the $2,650 level may trigger a decline towards the $2,633 area, with additional support around the monthly low near $2,605. Persistent selling pressures could lead to deeper losses, potentially testing the 100-day SMA near $2,573 and ultimately reaching monthly lows around $2,536.
