- Gold price attracts buyers for the fourth consecutive day and climbs to over a one-week high.
- Geopolitical risks stemming from the Russia-Ukraine conflict benefit the safe-haven XAU/USD.
- Elevated US bond yields could underpin the US Dollar and cap the non-yielding yellow metal.
Gold price (XAU/USD) maintains its bid tone heading into the European session and currently trades around the $2,660 level, or a one-and-half-week high touched earlier this Thursday. This marks the fourth straight day of a positive move and is sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war, which benefits the safe-haven precious metal. Apart from this, a modest US Dollar (USD) downtick further acts as a tailwind for the commodity.
That said, elevated US Treasury bond yields, bolstered by expectations that US President-elect Donald Trump’s proposed tariffs could spur inflationary pressures and limit the scope of the Federal Reserve (Fed) to cut interest rates, caps the non-yielding Gold price. Furthermore, the prevalent risk-on mood – as depicted by a generally positive tone around the equity markets – warrants some caution before placing aggressive bullish bets around the safe-haven XAU/USD.
Gold price bulls retain short-term control as Russia-Ukraine tensions fuel safe-haven demand
- Geopolitical tensions intensified after Russian President Vladimir Putin lowered the threshold for nuclear strikes and underpinned the safe-haven Gold price for the fourth straight day on Thursday.
- Investors seem convinced that US President-elect Donald Trump’s proposed expansionary policies could accelerate inflation and force the Federal Reserve to slow the pace of its rate-cutting cycle.
- Moreover, a slew of influential Fed officials recently cautioned on further policy easing, which remains supportive of elevated US Treasury bond yields and keeps the US Dollar near the YTD high.
- Lisa Cook, a member of the Federal Reserve Board of Governors, noted on Wednesday that the central bank might get forced into a pause on interest rate cuts if inflation progress slows down.
- Separately, Fed Governor Michelle Bowman said that the progress on inflation appears to have stalled and that the US central bank should pursue a cautious approach to monetary policy.
- Meanwhile, Boston Fed President Susan Collins said that more interest rate cuts are needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly.
- According to the CME Group’s FedWatch Tool, traders are currently pricing in just over a 50% chance that the Fed will lower borrowing costs at its December monetary policy meeting.
- The yield on the benchmark 10-year US government advanced by the most in a week on Wednesday, which, along with a positive risk tone, might cap the safe-haven precious metal.
- Thursday’s US economic docket features the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales data later during the North American session.
- Investors will also scrutinize speeches from Fed policymakers for cues about the future rate-cut path, which will drive the USD and provide some impetus to the non-yielding XAU/USD.
Gold price could appreciate further towards the next relevant hurdle near the $2,670-$2,672 region
From a technical perspective, the intraday move-up faces some resistance near the 50% retracement level of the recent pullback from the all-time peak touched in October. The said barrier is pegged near the $2,660 area, above which the Gold price could accelerate the momentum towards the $2,670-2,672 congestion zone. Some follow-through buying could allow the XAU/USD to aim at reclaiming the $2,700 round figure.
On the flip side, the $2,635-2,634 area, or the 38.2% Fibonacci retracement level, now seems to protect the immediate downside ahead of the $2,622-2,620 region and the $2,600 round figure. A convincing break below the latter could make the Gold price vulnerable and expose the 100-day Simple Moving Average (SMA), around the $2,557 region, with some intermediate support near the $2,570 zone. This is followed by last week’s swing low, around the $2,537-2,536 area, which if broken decisively will be seen as a fresh trigger for bearish traders and set the stage for deeper losses.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.04% | -0.51% | -0.09% | -0.21% | 0.03% | -0.24% | |
| EUR | 0.06% | 0.02% | -0.44% | -0.03% | -0.14% | 0.09% | -0.18% | |
| GBP | 0.04% | -0.02% | -0.43% | -0.06% | -0.18% | 0.07% | -0.20% | |
| JPY | 0.51% | 0.44% | 0.43% | 0.41% | 0.31% | 0.52% | 0.27% | |
| CAD | 0.09% | 0.03% | 0.06% | -0.41% | -0.11% | 0.13% | -0.13% | |
| AUD | 0.21% | 0.14% | 0.18% | -0.31% | 0.11% | 0.24% | -0.03% | |
| NZD | -0.03% | -0.09% | -0.07% | -0.52% | -0.13% | -0.24% | -0.27% | |
| CHF | 0.24% | 0.18% | 0.20% | -0.27% | 0.13% | 0.03% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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