Gold price (XAU/USD) remains resilient and maintains its upward momentum, hovering near the weekly peak during the early European session. The precious metal continues to garner support from safe-haven flows amid concerns over escalating tensions in the Israel-Hamas conflict. Despite the rise in US Treasury bond yields, fueled by hawkish expectations from the Federal Reserve (Fed) and resulting in a three-week high for the US Dollar (USD), gold has managed to hold its ground.
The market’s attention now turns to key macroeconomic releases from the United States, which will provide valuable insights into the Fed’s future rate-hike plans. Investors are eagerly awaiting the Advanced Q3 GDP data along with Durable Goods Orders, Weekly Initial Jobless Claims, and Pending Home Sales figures. These data points, coupled with a speech by Fed Governor Christopher Waller and US bond yields, are expected to impact USD dynamics and present short-term trading opportunities for XAU/USD traders.
Geopolitical risks continue to underpin the gold price, despite the rise in US Treasury bond yields and USD buying interest. The intensification of bombing by Israel’s military on Hamas targets in Gaza, along with the possibility of a ground invasion, increases the risk of further regional tensions. Various international powers are actively engaged in diplomatic efforts to de-escalate the situation between Israel and Hamas.
Although the US Dollar has rebounded from a one-month low, the XAU/USD bulls have shown resilience. Attention now turns to the preliminary estimate of US GDP, which is anticipated to reveal a 4.2% annualized expansion in the third quarter, compared to 2.1% growth in Q2. The market focus will later shift to the US PCE Price Index, which will provide significant momentum ahead of the upcoming FOMC meeting.
From a technical standpoint, the recent boost in buying around the $1,953-1,952 support-turned-resistance level suggests a favorable outlook for bullish traders. However, caution is warranted as the Relative Strength Index (RSI) on the daily chart nears overbought territory, indicating potential resistance around the psychological $2,000 mark. A sustained breakthrough could propel XAU/USD towards the next notable hurdle around the $2,022 area.
On the downside, initial support is seen near the Asian session low at approximately $1,980, followed by the $1,971-1,970 region. Further selling pressure may expose the recent weekly low in the $1,953-1,952 zone, a crucial horizontal resistance level that could act as a pivotal point. A decisive break below could make gold vulnerable to a deeper decline, targeting the 200-day Simple Moving Average (SMA) around the $1,932-1,931 range.
As traders await the release of US Q3 GDP data, gold price remains resilient near its weekly high, driven by geopolitical concerns and ongoing market dynamics, while technical indicators hint at potential resistance around the $2,000 level.