The price of gold (XAU/USD) has risen about 0.7% following the Christmas break due to growing geopolitical concerns. Additionally, the lack of US data this week has pushed market participants towards safe-haven assets resulting in renewed strength for gold. Supercharge your trading prowess with tips and tricks to trade Gold! LOW VOLUME AND LIQUIDITY MIGHT HAMPER UPSIDE The lack of volume and liquidity this week could dampen the upwards movement of gold. The absence of catalysts this week, alongside muted volume, suggests a possibility of rangebound trading. Although US equities continue to rally following the Christmas break, gold is experiencing significant safe-haven demand due to its disconnection from the consensus view held by market participants. A surge in geopolitical tensions has become a key driver for gold prices, causing it to reach new highs. It is worth noting that US Treasury Yields are continuing to trend lower as rate cut bets ramp up. DATA AHEAD Lack of US data this week will likely keep the US dollar under pressure ahead of 2024. Fears of further strife in the Middle East, general market sentiment, and a lack of catalysts drive prices moving forward. TECHNICAL OUTLOOK GOLD From a technical perspective, gold is looking bullish, and a daily candle close above the $2074 level could provide further impetus for bulls. However, geopolitical tensions remain the key driver for gold prices, and it is the only factor that could potentially push prices above the $2080/oz area. RESISTANCE LEVELS: $2080/oz SUPPORT LEVELS: The IG Client Sentiment data shows that retail traders are overwhelmingly long on gold. This might be a sign that gold could struggle to surpass the resistance level at $2080/oz. Zain Vawda, Markets Writer for DailyFX.com, mentions these insights regarding the gold price forecast, providing a comprehensive analysis of the factors influencing gold prices. The lack of catalysts and muted volume forecast range-bound trading as geopolitical tensions accelerate, elevating demand for the safe-haven metal. US data ahead of 2024 is likely to keep the US dollar suppressed. All these factors combined with technical charts data indicate a bullish outlook for gold. Given proper trading, the $2080 level could serve as a significant resistance. Please do note that the information provided in the article reflects the knowledge and view at the said time and can be subjected to market and economic changes. Always consult an investment professional for any financial decisions.
