Gold Prices Surge 3% to One-Week High: Key Levels and What’s Next

The softer dollar, which had paused its rally after a one-year high, made gold more attractive to global buyers. “Safe-haven demand is driving gold higher,” remarked Ilya Spivak, head of global macro at Tastylive. However, he cautioned that resistance near $2,700 could challenge further gains.

In the U.S., all eyes are on Federal Reserve officials, who are expected to offer insight into the potential trajectory of rate cuts. Currently, markets predict a 58.9% likelihood of a 25-basis-point cut in December. Higher rates typically weigh on gold, as they make non-yielding assets less appealing.

Technical Analysis: Key Levels to Watch

Gold continues to trade above the critical pivot point of $2,624.26, signaling bullish momentum. Key levels include:

• Immediate Resistance: $2,649.73

• Next Resistance Levels: $2,676.33 and $2,707.65

• Immediate Support: $2,624.26

• Next Support Levels: $2,592.23 and $2,561.74

Technical indicators also reinforce the bullish outlook. The 50-day EMA at $2,592.23 acts as a dynamic support level, while the RSI (14) reading of 66.88 warns of overbought conditions, indicating potential for a short-term pullback.

What’s Driving Gold Prices?

1. Geopolitical Risks: Russia’s strategic posturing escalates safe-haven demand for gold.

2. Dollar Weakness: A softer dollar boosts bullion’s appeal to international buyers.

3. Fed Rate Expectations: Speculation about rate cuts supports gold, but persistent inflation concerns may cap gains.

Conclusion

Gold’s trajectory appears bullish, driven by a combination of geopolitical concerns and a softening dollar. However, traders should monitor resistance near $2,649.73 and $2,676.33 for signs of a breakout or consolidation. With the RSI nearing overbought levels, short-term corrections are possible, but the underlying fundamentals suggest strong support around $2,624.26.

This week’s Federal Reserve commentary will be pivotal in determining whether gold can maintain its upward momentum or face renewed headwinds from a shift in monetary policy.