Gold prices rebounded on Monday, snapping a six-day losing streak as geopolitical risks and a softer USD supported the safe-haven asset. Despite modest intraday gains, expectations of less aggressive Fed rate cuts and elevated US bond yields limited the upside. The recent pullback stalled near key technical levels, with $2,536 acting as pivotal support. Geopolitical tensions, including heightened conflicts in Ukraine and Gaza, boosted haven flows, but robust US economic data and Fed hawkishness weighed on bullish sentiment. Strong follow-through buying above $2,600 is necessary to signal a bullish reversal.
Key Highlights
# Gold rebounded after a six-day losing streak, supported by haven demand.
# Softer USD and geopolitical risks provided tailwinds to XAU/USD.
# Elevated US Treasury yields capped gains for the non-yielding metal.
# Key technical support for Gold stands near $2,536-2,535 levels.
# Resistance looms near $2,600, with bulls awaiting strong triggers.
Gold prices (XAU/USD) recovered modestly on Monday, snapping a six-day losing streak as geopolitical tensions and a weaker US Dollar (USD) lent support. Prices edged toward $2,600 but failed to sustain momentum, reflecting market caution amid uncertain fundamentals. Last week, Gold marked its biggest decline since September 2023, hitting a two-month low as the USD soared to a one-year peak.
Geopolitical concerns bolstered safe-haven demand at the week's start. Rising conflicts in Ukraine, including US-authorized long-range missile strikes and Russian attacks on civilian and energy infrastructure, heightened market tensions. Simultaneously, escalations in the Gaza Strip and Lebanon added to the risk-off sentiment.
Despite these factors, Gold's upside remains capped by elevated US Treasury yields and expectations of a less aggressive Federal Reserve. Fed Chair Jerome Powell reaffirmed the need for caution in cutting rates, citing inflation above the 2% target. Boston Fed President Susan Collins also signaled uncertainty regarding further rate cuts, aligning with hawkish sentiments.
Technically, Gold faces critical support near $2,536-2,535, coinciding with its 100-day SMA. A break below this level could trigger a decline toward $2,500. On the upside, resistance near $2,600-$2,620 must be overcome for bulls to regain control, potentially targeting $2,700 in the short term.
Finally
Gold prices hover near $2,600, facing technical resistance and geopolitical uncertainties. Strong buying above $2,620 is key to confirming a bullish reversal, with $2,536 acting as pivotal support.