gold prices have recently staged a comeback, inching closer to a two-week high due to a mix of supportive factors in the market. Geopolitical concerns continue to fuel demand for the precious metal, while expectations of a Federal Reserve rate cut in December are enhancing the bullish sentiment surrounding gold . The current market dynamics show a favorable technical picture for buyers, suggesting further price gains may be on the horizon.
During the Asian trading session, gold attracted buyers, moving closer to peaks reached earlier. Renewed geopolitical tensions alongside a significant resumption of buying by China’s central bank have served as catalysts for the increase in gold demand. Additionally, worries about the economic repercussions from proposed tariffs by the US President-elect have contributed positively to gold ’s appeal as a safe haven asset.
Recent employment data from the United States, which indicated a slower labor market, bolstered speculations about a December interest rate cut by the Federal Reserve. This has led to a drop in US Treasury bond yields, reinforcing the attractiveness of gold as an inflation hedge. Conversely, a slight strengthening of the US Dollar, stemming from anticipation of a relatively more hawkish Fed stance, could temper gold ’s ascent ahead of crucial consumer inflation data set to be released.
Safe-haven demand is further amplified by ongoing geopolitical strife, particularly in the Middle East, following significant territorial shifts that have heightened market uncertainty. Additionally, the People’s Bank of China’s notable accumulation of gold has underscored a resilient demand for the yellow metal, further supporting its price.
Looking ahead, the US Consumer Price Index report will be pivotal, likely influencing Federal Reserve policy discussions and impacting gold pricing. gold is now striving to reclaim the $2,700 threshold, potentially testing resistance around $2,720-$2,722. Should it maintain above the $2,650 level, which aligns with critical moving averages, it may pave the way for additional bullish momentum. However, any significant decline below this support could lead to further losses, with the $2,625 and $2,600 levels marking potential downside levels.
