Gold News: XAU Prices Rally as Key Resistance Zone is Put to the Test

Gold Prices Rally on Safe-Haven Demand Testing Key Resistance Levels

Gold surged on Thursday, testing a significant retracement zone at $2,663.51 to $2,693.40, buoyed by heightened safe-haven demand. Traders are closely monitoring reactions within this zone as they anticipate potential breakout opportunities or signs of fresh selling. A push above the 50-day moving average of $2,661.35 could signal a bullish intermediate trend, increasing upside momentum.

However, with the short-term trend still leaning bearish, sellers may re-enter at these levels. Key price action between $2,663.51 and $2,693.40 will determine whether gold solidifies a lower high or gains momentum for further upside.

Safe-Haven Demand Boosts Gold Prices

Gold’s fourth consecutive day of gains comes as risk-off sentiment dominates the market. Falling global equities, triggered by a lackluster earnings outlook from AI giant Nvidia, have driven investors toward safe-haven assets. Geopolitical tensions have also played a role, with Ukraine’s missile strikes against Russia drawing attention. However, the prolonged nature of the Russia-Ukraine conflict has muted its influence on gold compared to earlier stages of the war.

“Safe-haven demand is more tied to stock market weakness than geopolitical developments,” noted Adrian Ash of BullionVault, pointing to the subdued market reaction despite Russian President Vladimir Putin’s recent nuclear rhetoric.

Economic Data and Treasury Yields in Focus

The benchmark 10-year Treasury yield edged lower to 4.402% as investors awaited key economic data, including weekly jobless claims and the Philadelphia Fed manufacturing index. Remarks from multiple Federal Reserve officials are also anticipated to shape expectations for future monetary policy.

The U.S. dollar remained strong, supported by uncertainty around President-elect Donald Trump’s policies and reduced expectations for aggressive Fed rate cuts. Market pricing for a December rate cut has fallen to just under 54%, compared to 82.5% a week ago.

Gold Prices Forecast

Gold’s current rally hinges on a decisive breakout above $2,693.40. A sustained move beyond this resistance could pave the way for a test of record highs near $2,790. Conversely, failure to breach this zone may invite renewed selling pressure, pushing prices back toward $2,600.

While elevated safe-haven demand offers near-term support, traders should remain cautious given mixed economic signals and geopolitical uncertainties. The market outlook remains tentatively bullish, contingent on gold holding above key support levels.