Trade and geopolitical tensionscoupled with falling bond yields and a weakening dollar, are fueling the recent rise in gold prices. A look back at the factors at play and future prospects.
A rise in prices under the effect of international tensions
The price of gold (XAU/USD) maintains a steady rise, reaching a two-day high at over 2650 dollars per ounce, during the first part of the European session. This increase is part of an economic climate marked by growing uncertainties, in particular due to the tariff policies announced by the President-elect of the United States, Donald Trump. These announcements reinforce the appeal of safe haven values, with gold in the lead.
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The decline in US bond yields also contributes to the persistent weakness of the dollar, thus favoring purchases of precious metals. At the same time, a hesitant tone on European stock markets accentuates the attraction for gold, while recent FOMC minutes suggest limited prospects for further rate cuts by the Federal Reserve.
A geopolitical context under high tension
Geopolitical tensions continue to weigh heavily. Ukraine has reported an intensification of Russian attacks, marked by the use of hypersonic missiles and Russia's supposed deployment of North Korean troops. This escalation, combined with Ukrainian responses supported by Western missiles, is fueling fears of a worsening of the conflict.
In a more calming dynamic, the ceasefire recently concluded between Lebanon and Israel, announced by American President Joe Biden, marks a moment of respite in tensions in the Middle East. However, the balance remains fragile, leaving gold to play its role of refuge in the face of uncertainty.
American economic indicators: increased vigilance
Investors are looking forward to upcoming U.S. economic indicators, including preliminary third-quarter GDP data and the PCE Price Index. These elements will be decisive in assessing the future direction of monetary policies and their effects on the price of gold.
Recent consumer confidence data, released by the Conference Board, revealed renewed optimism, reaching their highest level since July 2023. Separately, speculation about a possible rate cut at the December meeting of the Fed remain high, with a probability of 63% according to the CME Group.
Technical analysis: what prospects for gold?
From a technical point of view, the rebound observed on Tuesday from the 61.8% Fibonacci retracement level confirms some bullish momentum. However, daily oscillators suggest caution, with resistance possible around the 2665 dollarsclose to the 100-period simple moving average.
In the event of a pullback, support could materialize around 2624-2622 dollarsfollowed by the psychological threshold of 2600 dollars. A break below this level could initiate a further bearish correction, with potential targets located between 2568 dollars and monthly lows around 2537 dollars.
The challenge of ordering durable goods
U.S. durable goods orders, also expected today, are a key indicator for gauging the health of U.S. industrial production. An increase higher than the consensus of 0,5 % could support the dollar, thus weighing on the price of gold. Conversely, lower figures would strengthen the attractiveness of the precious metal.
The current rise in gold prices reflects an unstable economic and geopolitical environment. Between trade tensions, military risks and prudent monetary policies, gold seems more than ever to solidify its status as a safe haven asset.
