Gold (XAU) Daily Forecast: Geopolitical Risks Push Prices Toward $2,680 Resistance

By:

Published: Nov 21, 2024, 07:31 GMT+00:00

Key Points:

Geopolitical tensions and global risks push gold to $2,660.63, with resistance levels at $2,680 and $2,708 driving bullish momentum.
Spot gold holds above the $2,652 pivot, supported by a bullish EMA crossover, signaling continued strength in the safe-haven asset.
Gold ETF demand rises 0.36%, reaching 875.39 metric tons, as institutional investors seek shelter from economic uncertainty.

Gold (XAU) Daily Forecast: Geopolitical Risks Push Prices Toward $2,680 Resistance

Market Overview

Gold prices advanced for the fourth consecutive session on Thursday, supported by heightened geopolitical uncertainty and cautious market sentiment. Escalating tensions in Eastern Europe, coupled with global economic risks, have boosted demand for safe-haven assets.

Spot gold rose as Ukraine reportedly deployed advanced weaponry, intensifying concerns about further instability in the region. The U.S. veto of a U.N. Security Council resolution earlier this week has added to geopolitical strains, while broader economic risks, including mixed signals from the Federal Reserve, are shaping market sentiment.

Despite the potential headwind of a December rate cut, gold remains bolstered by its appeal as a hedge against volatility.

Fed Policy and Key Economic Data in Focus

Investors are closely watching U.S. jobless claims, expected to rise to 220,000 from 217,000, with data scheduled for release at 2:30 PM GMT. The Philly Fed Manufacturing Index, forecasted at 7.4, signals a continued slowdown in economic activity, while existing home sales are projected to climb slightly to 3.95 million units from 3.84 million.

Federal Reserve policymakers have offered contrasting views on inflation and interest rates, keeping market participants on edge. One Fed governor cautioned about persistent inflation risks, while another pointed to progress in managing price pressures.

The CME FedWatch Tool indicates a 56% likelihood of a 25-basis-point rate cut in December. While such a move could limit gold’s short-term gains, the broader outlook remains positive.

ETF Activity Reflects Strong Demand

SPDR Gold Trust, the largest gold-backed exchange-traded fund, reported a 0.36% increase in holdings to 875.39 metric tons on Wednesday, signaling robust institutional demand.

Analysts suggest that while immediate gains may be influenced by the Fed’s rate decisions, gold’s resilience amid global uncertainty solidifies its appeal. “The long-term outlook remains favorable, given gold’s role as a store of value in unpredictable economic conditions,” noted Kyle Rodda, a financial analyst.

With a low-interest-rate environment and continued demand, gold prices are likely to maintain their upward trajectory in the near term. Investors remain focused on upcoming data and geopolitical developments to gauge the next market move.

Short-Term Forecast

Gold prices are projected to remain bullish short-term, with immediate resistance at $2,680.25. Strong support at $2,652.39 reinforces upward momentum, driven by geopolitical risks and technical strength.

Gold Prices Forecast: Technical Analysis

Gold – Chart

Gold is trading at $2,660.63, up 0.39%, as bullish sentiment strengthens on a 4-hour chart. The price is holding above the pivot point at $2,652.39, signaling continued upward momentum.

Immediate resistance is seen at $2,680.25, with further targets at $2,708.96 and $2,726.69. On the downside, support lies at $2,621.99, followed by $2,595.81.

A bullish crossover between the 50-day EMA ($2,628.57) and the 200-day EMA ($2,653.04) reinforces the buying trend. However, a break below $2,652.39 could trigger sharper selling pressure toward $2,621.99.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.