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Gold prices maintain a positive trend, trading near a two-week high amid escalating geopolitical tensions and softer US Treasury yields. Factors like China's resumption of gold purchases and heightened safe-haven demand due to the Russia-Ukraine conflict and political unrest in South Korea and France bolster prices. Despite hawkish comments from Fed officials hinting at a potential pause in rate cuts, expectations of lower borrowing costs and subdued US Dollar strength support Gold’s bullish outlook. Technically, a breakout above $2,650 strengthens prospects for a rise towards $2,700, with immediate support at $2,650 and potential resistance at $2,720-$2,722. Traders now await the US CPI report, which may shape future price movements.

Key Highlights

* Gold prices hover near a two-week high on geopolitical tensions and Fed rate cut bets.

* China’s central bank resumes gold purchases, lending support to bullion prices.

* Subdued US Dollar and Treasury yields enhance safe-haven appeal for gold.

* Technical breakout above $2,650 paves the way for further upside.

* Traders await US CPI data for fresh insights into Gold’s price trajectory.

Gold prices continue to trend upward, trading near a two-week high as safe-haven demand surges amid geopolitical risks and subdued US Treasury yields. The ongoing Russia-Ukraine war, coupled with political unrest in South Korea and France, has driven investors towards the yellow metal. Additionally, China’s central bank resumed its gold purchases after a seven-month hiatus, buying 160,000 troy ounces in November, which provides further tailwinds to bullion prices.

The softer US Dollar, pressured by declining Treasury yields and market speculation over a December rate cut by the Federal Reserve, adds to Gold's strength. The CME FedWatch Tool indicates an 85% probability of a 25-basis-point rate cut, keeping the US Dollar defensive. However, hawkish Fed remarks and concerns over potential inflation from US President-elect Donald Trump’s aggressive trade policies may temper gains.

Technically, Gold’s breakout above $2,650, supported by strong oscillators, signals a bullish trajectory towards the $2,700 mark and the $2,720-$2,722 resistance zone. Conversely, any dip below $2,650 could test support levels near $2,625 and eventually $2,600.

This week, investors will closely monitor the US Consumer Price Index (CPI) data, which could guide Federal Reserve decisions and influence Gold’s price direction.

Finally

Gold prices are poised to test $2,700, with key resistance at $2,720-$2,722. Support lies at $2,650, with CPI data pivotal for upcoming trends.

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