Gold prices have surged to an eight-day high, trading above $2,650 during early Thursday’s Asian session. The precious metal remains buoyed by geopolitical tensions and safe-haven demand, as traders look forward to Federal Reserve (Fed) speeches for further direction in the absence of key US economic data releases.

World Tensions Causing Gold Price Hit 8th Day High

Gold prices have recently reached an eight-day high, trading above $2,650 per ounce. This surge is largely attributed to escalating geopolitical tensions, particularly between Russia and Ukraine, which have heightened demand for safe-haven assets like gold. Additionally, mixed signals from the Federal Reserve regarding future interest rate policies have contributed to market uncertainty, further bolstering gold’s appeal. Despite a strong U.S. dollar and robust stock market performance, gold has maintained its upward trajectory, underscoring its role as a hedge against geopolitical and economic uncertainties.

Gold Price Resilience Amid Geopolitical Tensions

Gold prices extended their recovery for the fourth consecutive session on Thursday, driven by a pullback in the US Dollar (USD) and Treasury bond yields. The initial rally in the USD on Wednesday, fueled by optimism around Trump trades and hawkish Fed commentary, has started to fade, providing some relief to gold buyers.

Despite the hawkish tone from several Fed officials, geopolitical tensions between Russia and Ukraine have kept gold’s safe-haven appeal intact. Russia’s Defense Ministry recently accused Ukraine of launching missile attacks with US-made weapons, escalating threats of nuclear retaliation. As the conflict intensifies, gold continues to find support as investors seek safety in uncertain times.

Market Sentiment and Fed Signals

Fed expectations have shifted, with markets now pricing a 52% chance of a 25 basis point rate cut in December, down from 83% a week ago, as per the CME Group’s FedWatch Tool. Diverging opinions among Fed officials have added uncertainty to future monetary policy.

• Hawkish Commentary: Fed Governor Michelle Bowman advocated caution in policy decisions, suggesting limited scope for rate cuts.
• Mixed Views: Fed Governor Lisa Cook emphasized the importance of incoming data, while Kansas Fed President Jeffrey Schmid leaned dovish, suggesting it may be time to reduce policy restrictiveness.
• Dovish Outlook: Boston Fed President Susan Collins reiterated the need for additional rate cuts, citing still-restrictive policies.

This mixed messaging has left traders cautious, with gold prices poised to react to upcoming Fed speeches.

Impact of Broader Market Trends

Global risk sentiment remains fragile following Nvidia’s lackluster revenue forecast, which highlighted concerns over tech sector performance despite strong AI-driven growth. Broader risk aversion could further fuel demand for gold, though any recovery in the USD as a safe-haven alternative may cap gains.

Gold Price Technical Analysis

Short-Term Outlook

Gold’s technical setup currently favors buyers:

• The 14-day Relative Strength Index (RSI) hovers above the neutral 50 level, indicating bullish momentum.
• However, a potential Bear Cross looms as the 21-day Simple Moving Average (SMA) approaches the 50-day SMA from above. A bearish crossover could signal selling pressure.

Key Levels to Watch

Upside Targets:

A daily close above the 50-day SMA at $2,660 could pave the way for a recovery toward the 21-day SMA at $2,680.

The psychological resistance at $2,700 is the next major target for buyers.

Downside Risks:

Failure to break the 50-day SMA could see sellers regaining control, targeting $2,610 initially.

A drop below $2,600 could extend the downside, reinforcing bearish sentiment.

ForexTab choice: XAU/USD Target Price $2,700

Outlook: Geopolitical Risks and Fed Policy in Focus

Gold’s performance remains influenced by ongoing geopolitical tensions and evolving Fed policy expectations. While safe-haven demand supports prices, hawkish Fed commentary and a potential USD rebound may limit gains. Traders should closely monitor developments from the Russia-Ukraine conflict and upcoming Fed speeches for clearer direction.

For now, a decisive move above the 50-day SMA will be critical for bulls to extend the recovery, while failure at this level could bring sellers back into the picture.

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