Gold prices are rising, reaching USD 2,625.54, as a weaker US dollar, geopolitical tensions, and strong demand drive gains. Traders now await Federal Reserve updates and interest rate signals for the next move.
Gold prices continued their upward climb, reaching a high of USD 2,625.54 on Tuesday, as indicated in the attached chart.
The metal settled at USD 2,622.64, maintaining a steady advance from last week’s low of USD 2,559.52.
This surge is driven by a combination of a weaker US dollar, escalating geopolitical risks, and strong bullish sentiment in the market.
The recent decline in the US dollar, largely due to profit-taking following its previous rally, has made gold more attractive to buyers using other currencies, further boosting demand for the precious metal.
Market participants are closely following statements from Federal Reserve officials this week, which could provide insights into potential rate changes at the December meeting.
Current market sentiment suggests a 58.8% likelihood of a 25-basis-point rate cut, with a 41.2% chance of rates remaining unchanged. Lower interest rates typically benefit gold by reducing the cost of holding non-yielding assets.
Russia’s most significant airstrike on Ukraine in three months has heightened geopolitical tensions, increasing demand for safe-haven assets like gold.
Simultaneously, the US labour market remains tight, sustaining inflationary pressures and complicating the Federal Reserve’s policy decisions.
In the short term, gold’s trajectory will depend on upcoming Fed commentary and developments in global geopolitics.
If the dollar stabilises or the Fed signals a dovish stance, gold may challenge higher resistance levels, with USD 2,650 acting as a potential cap for gains.
Traders should remain attentive to fluctuations in the dollar, interest rate expectations, and geopolitical factors as key indicators for the metal’s next moves.
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