Gold prices remain remarkably resilient, hovering near record levels as various factors bolster the precious metal's reputation as a leading safe-haven asset. The December futures contract closed at $2,754.70, holding onto most of its gains after achieving an all-time closing high.
Gold's strength reflects increasing global uncertainties, with various geopolitical tensions reinforcing its traditional role as a safe-haven asset. Israel's recent "precise and powerful" retaliatory strikes against Iran have raised regional tensions, even though they were calibrated to avoid major escalation. By intentionally steering clear of Iran's oil and nuclear facilities, these strikes have prevented a sharp spike in gold prices while establishing a solid support for current valuations.
Iranian Supreme Leader Ayatollah Ali Khamenei’s comments, suggesting that Israel's actions should be "neither downplayed nor exaggerated," have kept markets on edge as investors anticipate Iran's possible shift in response strategy.
Gold's elevated valuations are further supported by the intensifying situation in Eastern Europe. The Pentagon's recent announcement of continued unrestricted Ukrainian access to American weapons coincides with reports of North Korean military involvement near Ukraine's border. The presence of around 100,000 North Korean troops in Russia's Kursk Oblast, as noted by Pentagon spokesperson Sabrina Singh, marks a significant escalation in the conflict's complexity.
With the U.S. presidential election just eight days away, additional support for gold prices is emerging. The stark ideological divide between Democratic and Republican candidates, coupled with extremely tight polling, has driven investors to seek refuge in traditional safe-haven assets. The anticipated market volatility surrounding this closely contested election continues to push investment flows toward gold as a hedge against political uncertainty.
Gold's current trading pattern, marked by high-level consolidation rather than sharp fluctuations, indicates a fundamental shift in market sentiment. Investors seem to be holding substantial positions in gold, viewing it not only as a tactical hedge against immediate geopolitical risks but also as a strategic asset amid ongoing global uncertainty.
Gold prices continue to show an upward bias, consolidating within a range of $2,708 to $2,758 over the past four days without breaking through the established boundaries. Momentum indicators point to increasing buying strength, as the Relative Strength Index (RSI) has reversed its downward trend and is now moving higher within bullish territory.
If XAU/USD can clear the $2,750 mark, the next resistance level to watch will be the year-to-date high at $2,758. Should this level be surpassed, the subsequent target will be $2,800.
On the downside, a drop below the October 23 low of $2,708 would bring the next support level at the 38.2% Fibonacci Retracement level of $2,699, followed by the 50% and 61.8% Fibonacci levels at $2,681 and $2,662, respectively.
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