- Summary:
- Gold price has newfound momentum as safe haven demand cracks dollar. Here's why $2,660 support could be the start of further gains by XAUUSD.
Gold price stayed on the ascent for the fourth session a row on Friday as investors as safe heaven demand and geopolitical concerns provided propulsion. XAUUSD was up by 1 percent to trade at $2,664 per ounce at the spot market. Stability above the $2,600 mark underlines gold’s resilience as the dollar’s Trump-driven rally cools off.
The Russia-Ukraine war has recently triggered panic across global markets. Russia has threatened to use its hypersonic ballistic missiles against critical installations in Ukraine, including government buildings. With Ukraine previously getting approval to use US-supplied missiles long-range missiles to attack Russia, there is a rising prospect of an escalation. That favours gold prices, thanks to its stronger safe haven status relative to the dollar.
Also President-elect Donald Trump’s tariff hike threats against China, Mexico and Canada this week risk triggering trade wars in the coming months. No currency stands to benefit in such an environment, making gold a more attractive investment.
In addition, the latest US Personal Consumption Index (PCE) and Q3 GDP data matched forecasts, raising bets of a 25 basis points cuts by the Fed in December. These will add downward pressure on the dollar amid falling US treasury bonds. Yields on benchmark 10-year bonds were down by 27 basis points to 4.215 at the time of writing.
Gold price prediction
Gold price pivots at 2,628, and the upside will prevail if action stays above that mark. Otherwise the sellers
Resistance: The first resistance is likely to be at $2,660. However, as stronger momentum could go above that hurdle and test $2,665.
Support: Gold price will likely find initial support at $2,651. However, a protracted bearish control could break below that level, which would invalidate the upside thesis. That could extend the decline to test the second support at $2,647.
