Gold News: Resistance at $2604 Holds the Key to the Next Price Breakout

Gold Prices Rise as Dollar Pauses and Yields Hold Steady

Gold prices are trading higher on Monday, recovering from a six-session losing streak, after finding support near $2536.85 last week. The rebound comes as the U.S. dollar stalls below its recent one-year high, making gold more attractive for non-dollar holders.

At 10:55 GMT, XAU/USD is trading $2591.51, up $28.29 or +1.10%.

Gold is Facing Resistance Near Key Levels

Gold is currently facing resistance at $2604.39, a critical technical level that traders are watching closely. A sustained break above this level could generate momentum, pushing prices toward the 50-day moving average at $2653.63 and the retracement zone between $2663.51 and $2693.40. However, if new sellers emerge at these higher levels, it could signal continued pressure on gold.

On the downside, a break below $2536.85 would indicate weakness, potentially triggering a sharper decline toward the 200-day moving average at $2403.46.

Dollar and Treasury Yields Influence Gold’s Movement

Gold’s recovery is partly driven by a pause in the U.S. dollar’s rally, following last week’s 1.6% gain. The dollar index remains elevated after a strong performance in October, fueled by expectations that the Federal Reserve will scale back its rate cuts.

Meanwhile, U.S. Treasury yields are holding steady, with the 10-year note at 4.4316% and the 2-year yield slightly lower at 4.2992%. Rising yields continue to limit gold’s upside by increasing the opportunity cost of holding non-yielding assets.

Fed Commentary and Economic Data in Focus

Traders are awaiting key remarks from several Federal Reserve officials this week, including policymaker Austan Goolsbee later today, which could provide further clarity on monetary policy. Upcoming U.S. economic data, such as housing and manufacturing reports, will also influence gold’s direction.

Market Outlook for Gold

Gold’s near-term outlook hinges on its ability to break above $2604.39. If this resistance is cleared, the market could target $2653.63 and higher levels. Conversely, a dip below $2536.85 would favor a bearish scenario, with further losses likely. Traders should remain alert to moves in the dollar and Treasury yields, as they continue to be pivotal factors for gold prices.