The price of gold continues to rise for the fifth consecutive day, reaching its highest level in two weeks. This trend is fueled by the intensifying conflict between Russia and Ukraine, which is driving demand for this refuge metal.
A rise driven by geopolitical tensions
The deterioration of the situation between Russia and Ukraine continues to stimulate gold purchases. On Friday, the precious metal crossed a new threshold, supported by persistent concerns over military escalation. Russia's recent use of medium-range missiles in response to attacks carried out with weapons supplied by Western powers has increased market uncertainty.
Also read: Gold heading for a new price record?
Despite a robust US dollar, supported by speculation on a less accommodating monetary policy from the Federal Reserve (Fed), the price of gold remains on the rise. This trend demonstrates gold's resilience in the face of pressure from high US bond yields and a strong currency.
Uncertain economic and monetary outlook
Investors are scrutinizing statements from Fed officials, looking for clues about the future of interest rates. Several influential members of the Monetary Policy Committee have warned of potential inflationary shocks. Although markets are pricing in a 25 basis point rate cut in December, voices like Jerome Powell are calling for caution in the face of persistent signals of underlying inflation.
Other economic data reinforce these uncertainties. As weekly jobless claims hit a seven-month low, the manufacturing sector is showing signs of contraction, as evidenced by the Philadelphia Fed index. This divergence fuels debates on the capacity of the global economy to absorb current shocks.
Critical technical levels for the price of gold
In terms of technical analysis, crossing the $2,665 threshold constitutes a strong signal for investors. This level, corresponding to the confluence of several key indicators, opened the way for a new rise towards $2,700. A lasting break beyond this symbolic mark could propel gold towards the resistance zone located between $2,710 and $2,737.
On the other hand, a decline below $2,665 could revive bearish pressure, potentially bringing the precious metal back towards $2,600, or even $2,537 in the event of a marked correction.
A currency map revealing contrasting dynamics
The US dollar continues to strengthen against major global currencies. In particular, it posted a gain of 0.58% against the New Zealand dollar, while progressing moderately against the euro and the yen. This strength reflects the appetite for safe assets in a context of increased volatility.
Despite the uncertainties weighing on global economic policies, gold stands out more than ever as a safe haven. Its evolution remains closely linked to geopolitical tensions and market expectations on the future trajectory of interest rates.
