The gold market regains strength this Friday, driven by a weakening of the US dollar and persistent geopolitical tensions. Investors, attracted by the security offered by the precious metal, see these events as an opportunity for stabilization in the face of a rapidly changing global economy.
Also read: Gold nears a new record!
A falling dollar supports the rise of gold
Since Thursday, the dollar experienced a slight decline after reaching its highest level in a month. This decline caused a rush for gold, a popular safe haven in times of uncertainty. The dollar’s correction comes after several weeks of strong recovery, marking a turning point as investors seek to protect their assets in the face of market volatility.
Tensions in the Middle East: a supporting factor for gold
Ongoing conflicts in the Middle East, particularly with exchanges of fire between Israel and factions in Lebanon, add a layer of nervousness to the markets. With the possibility of military escalation, investors are turning to gold, increasing its appeal. The prospect of large-scale war in this critical region pushes the XAU/USD to flirt with its record levels, reaching the 2 668 dollars during the European session.
Fed decisions and American jobs in the crosshairs
Despite this rise, some analysts remain cautious. Indeed, the prospects of a less aggressive monetary policy of the US Federal Reserve (Fed) could slow down the progression of gold. Markets are eagerly awaiting monthly US employment data, due later today, to get clear indications on the state of the US economy. These figures will strongly influence the Fed’s decisions regarding a possible reduction in interest rates, thus impacting the future evolution of the dollar and, by extension, that of gold.
Technical analysis: a key resistance to watch
From a technical point of view, the price of gold remains in a bullish consolidation phase. Oscillating indicators on the daily chart remain positive, suggesting a possible further push towards the 2 700 dollars. However, resistance levels around $2,672 to $2,673 will have to be crossed to confirm a lasting upward trend.
On the other hand, if the price were to break below 2 625 dollarssellers could intensify their positions, leading to a decline up to 2 600 dollars or even lower, with potential support around the 2 560 dollars. Volatility therefore remains to be monitored closely.
With a combination of geopolitical and economic factors working in gold’s favor, the precious metal could well continue its run towards a new all-time high. Investors are keeping a close eye on global events and monetary decisions, ready to adjust their strategies in the face of uncertainty that continues to dominate financial markets.
