Article by: ETO Markets
Gold prices (XAU/USD) retain a positive tone, fuelled by safe-haven demand amid rising geopolitical tensions, including conflicts in the Middle East that forced Syrian President Bashar al-Assad to flee, and the resumption of gold purchases by China's central bank after a seven-month hiatus. Market concerns over US President-elect Donald Trump's aggressive tariff plans, which could lead new global trade wars, further enhance gold's appeal. However, gains remain capped as expectations of inflationary pressures from Trump's policies, combined with hawkish comments from Federal Reserve officials, suggest a potential pause in the Fed’s rate-cutting cycle. This dynamic has strengthened the US Dollar and lifted US Treasury yields, exerting downward pressure on gold. Traders are closely watching the US Consumer Price Index release on Wednesday, which could shape the Fed's policy outlook and influence gold's trajectory, as the market prices in a strong likelihood of a December rate cut.
From a technical perspective, Gold's breakout and daily close above the $… mark signal bullish momentum. The price has also surpassed the $… level, which corresponds to the 55-day Simple Moving Average, with oscillators on the daily chart supporting potential gains toward $… and the $… resistance zone. However, the $… level, now aligned with the 200-period EMA on the 4-hour chart, acts as immediate support. A break below this level could lead to a decline toward $… (the weekly low) and potentially to $…. Further weakness beneath the 100-day SMA, around $…, might pave the way for a drop to the November swing low near $….
