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Gold price (XAU/USD) retains its positive bias through the Asian session on Tuesday, though it lacks follow-through buying and remains below a two-week high touched the previous day. Investors seem convinced that US President-elect Donald Trump’s policies will boost inflation and force the Federal Reserve (Fed) to pause its rate-cutting cycle. This, in turn, acts as a tailwind for the US Dollar (USD) and turns out to be a key factor capping gains for the non-yielding yellow metal.That said, geopolitical tensions might continue to bolster safe-haven demand, which, along with the resumption of buying by China’s central bank for the first time in seven months, should offer support to the Gold price. Adding to this, concerns that Trump’s tariff plans could trigger a second wave of global trade wars support prospects for further near-term gains for the XAU/USD. Traders, however, might opt to wait for the release of the US consumer inflation figures on Wednesday.
Gold price bulls have the upper hand amid safe-haven demand, December Fed rate cut bets, and central bank buying
Gold price seems poised to appreciate further; Monday’s breakout above the $2,650 supply zone in play
From a technical perspective, the overnight breakout through and daily close above the $2,650 barrier could be seen as a fresh trigger for bullish traders. Moreover, oscillators on the daily chart have just started gaining positive traction and support prospects for a further appreciating move for the Gold price. Hence, some follow-through strength towards reclaiming the $2,700 mark, en route to the $2,720-2,722 supply zone, looks like a distinct possibility.On the flip side, the $2,650 resistance breakpoint, which coincides with the 200-period Exponential Moving Average (EMA) on the 4-hour chart, should now act as an immediate strong support. A convincing break below might expose the next relevant support near the $2,625-2,620 area before the Gold price eventually drops to the $2,600 mark. A subsequent break below the 100-day SMA, currently around the $2,590-2,585 region, will set the stage for deeper losses and drag the XAU/USD to the November swing low, around the $2,537-2,536 zone.More By This Author:GBP/USD Eases From Multi-Week High, Trades With Negative Bias Below Mid-1.2700s WTI Struggles Near Weekly Low, Below $68.00 Mark As Traders Await US NFP Report USD/CAD Slides Back Closer To Mid-1.4000s Amid Modest USD Weakness