Gold prices made a modest recovery on Friday, November 29, during a thin post-holiday trading session. The increase was attributed to a weaker U.S. dollar and ongoing geopolitical tensions.
The yellow metal remains on course to post its largest monthly drop since September 2023, with a 3% decline in November. This drop has largely been driven by a stronger dollar and profit-taking following recent gains.
Gold Price Trends
Spot gold recorded its third consecutive daily gain, trading at $2,658.98, up $21.99 or 0.79% as of 02:37 PM GMT. Despite this modest rally, November has been a challenging month for gold, with the U.S. dollar strengthening by 2%, putting pressure on the precious metal.
Earlier this week, gold found strong technical support near the $2,605.31 level, a key retracement zone.
Immediate resistance is seen at $2,663.51, with further hurdles at the 50-day moving average of $2,669.53 and Fibonacci resistance at $2,693.40. A sustained break above these levels could signal further upside potential for gold.
U.S. Dollar Dynamics
The U.S. dollar index dipped to its lowest point since mid-November, offering some short-term relief to gold prices.
The dollar’s overall strength throughout the month—bolstered by expectations of prolonged higher interest rates in the U.S.—has continued to weigh on gold.
Geopolitical tensions have also kept safe-haven demand for gold strong. While ceasefire talks in the Middle East have eased some concerns, the ongoing conflict between Russia and Ukraine has remained a significant source of uncertainty, driving investors toward gold as a protective asset.
Recent Russian attacks on Ukraine’s energy infrastructure have further fueled market unease, creating a potential floor for gold prices.
Focus Shifts to Key Economic Data
Looking ahead, investor attention is now turning to important U.S. economic data, including the highly anticipated jobs report next week.
These reports will offer insights into the Federal Reserve’s policy stance and could have significant implications for both the dollar and gold prices.
With the Fed’s focus on controlling inflation, the outlook for interest rates will be a key factor in determining gold’s appeal as a non-yielding asset.
Safe-Haven Demand
Gold and silver prices gained some momentum on Friday, driven by safe-haven demand amid rising geopolitical risks.
Russian President Vladimir Putin’s recent threats to strike Kyiv and escalating tensions between Russia and North Korea have increased market uncertainty.
Moreover, the fragile ceasefire between Israel and Lebanon further underscores the geopolitical risks that continue to support gold’s safe-haven appeal.
A weaker U.S. dollar index, which posted its largest weekly loss in three months, and a slight dip in U.S.
Treasury yields have helped boost precious metal prices. February gold futures rose to $2,685.20, while March silver futures surged by $0.759 to $31.315, reflecting growing interest in safe-haven assets.
Mixed Global Market Sentiment
Global markets exhibited mixed signals, with Asian and European stock markets showing varying results. In the U.S., trading volumes were subdued due to the Thanksgiving holiday, but stock indexes showed signs of stronger openings.
Chinese stocks rallied on hopes of economic stimulus measures from an upcoming policy meeting in December. Meanwhile, U.S. equities have performed strongly, with the S&P 500 poised to post its best monthly performance since February.
The contrast between equities and safe-haven assets like gold and silver highlights the uncertainty in broader markets, as investors weigh the risks of global geopolitical tensions against potential gains in the stock market.
Market Sentiment and Outlook
Gold’s near-term outlook remains range-bound, with key technical support levels at $2,605.31 and resistance at $2,669.53.
While a weaker dollar or rising geopolitical tensions could provide upward momentum for gold, the ongoing strength of the dollar and expectations for higher interest rates may limit gains.
Investors are closely monitoring both global developments and domestic economic indicators as they navigate this period of heightened uncertainty.
Although geopolitical risks remain elevated, the market sentiment suggests cautious optimism for those looking to diversify portfolios with precious metals.
Disclaimer – The information in this article is for informational purposes only and should not be considered as financial advice. MarketScope Daily does not provide investment advice, and the content is not an endorsement to buy or sell any asset. Please conduct your own research and consult a certified financial advisor before making any investment decisions. The performance of gold or other financial assets is subject to market risks, and past performance is not indicative of future results. MarketScope Daily is not responsible for any loss or damages resulting from reliance on the information presented.
