This stability stems from a complex dance of global events. The dollar’s strength, bolstered by firm policy signals, has kept a lid on gold’s momentum.
Meanwhile, easing tensions in the Middle East have muted safe-haven demand, but the underlying risks of escalation remain, keeping traders on edge. Geopolitical uncertainty and macroeconomic developments loom as key drivers, setting the stage for potential volatility.
Former President Trump’s sharp rhetoric against BRICS nations and threats of steep tariffs on economies distancing themselves from the dollar has added fuel to market jitters. While these moves have spurred safe-haven demand for gold, his pro-growth, dollar-boosting policies have simultaneously pressured the metal.
Adding to the unease, Trump’s foreign policy proclamations—such as his recent ultimatum to Hamas regarding hostages—have heightened geopolitical tension. If instability in the Middle East worsens, gold’s safe-haven allure could strengthen, counteracting dollar headwinds.
Eyes now turn to Federal Reserve Chair Jerome Powell, whose upcoming remarks may offer clues about the central bank’s next steps. Markets expect cautious commentary, but any surprises could inject fresh volatility into gold prices.
Longer-term, Trump-era inflationary pressures could prompt the Fed to adopt a more measured rate policy. While this scenario may not immediately alter gold’s balanced trading range, persistent fiscal challenges could revive the metal’s bullish prospects.
Though the Ukraine-Russia conflict and Middle East tensions have eased somewhat, the potential for flare-ups keeps investors on alert.
Upcoming U.S. employment data and geopolitical developments could be pivotal in determining gold’s trajectory. For now, a stable environment has allowed gold to hold its ground, but any disruptions could fuel fresh upside momentum.
Technical Levels to Watch
On the technical front, gold’s early November decline broke its upward channel, marking its largest monthly drop since September 2023.
Support near $2,600 has held firm, aligning with the Fibonacci 0.386 level and the 3-month EMA.
Resistance has shifted to $2,670, with a push above this level opening the door to $2,790. Conversely, a breach below $2,600 could drive prices toward $2,500.
In the short term, gold is likely to trade between $2,600 and $2,715. However, the metal remains poised for potential breakout moves, with new risks to the global economy serving as potential catalysts for higher prices.
For traders, staying vigilant is key as gold balances between steady support and opportunities for resurgence.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk rests with the investor. We also do not provide any investment advisory services.
This article was originally published here.
