The Gold price (XAU/USD) extended its recovery for the second straight day, trading near $2,635 in North American markets. Investors are flocking to gold, the ultimate safe-haven asset, amid heightened geopolitical tensions. These fears intensified after Russian President Vladimir Putin approved significant revisions to the country’s nuclear policy, sparking global concerns.
Russian Nuclear Doctrine Update Raises Alarm
Russian Press Secretary Dmitry Peskov explained that the revised nuclear policy allows the use of nuclear weapons in response to conventional weapon aggression threatening Russia’s sovereignty. This announcement, coupled with the U.S. supplying ATACMS missiles to Ukraine, has escalated fears of a prolonged conflict.
Ukraine reportedly launched U.S.-made ballistic missiles into Russian territory, further fueling geopolitical uncertainty. Historically, gold prices surge during periods of conflict or risk escalation, as investors prioritize asset safety over other investments.
Geopolitical Risks Drive Gold’s Resurgence
The Gold price has rebounded from significant losses earlier this month, driven by deepening geopolitical turmoil. U.S. policies under President Biden, including military support for Ukraine, have further strained international relations. Amid rising inflation expectations and Federal Reserve policies, gold’s recovery reflects its position as a global hedge during volatile times.
According to analysts at Nomura, inflationary pressures may delay or reduce the Federal Reserve’s interest rate cuts, indirectly supporting gold prices. The U.S. Dollar Index has also eased to 106.00, providing additional tailwinds for gold.
Technical Analysis: Gold Price Levels to Watch
Gold prices found support near the 100-day Exponential Moving Average (EMA) at $2,535 before climbing back to the 50-day EMA at $2,635. With the 14-day Relative Strength Index (RSI) now above 40.00, bearish momentum has faded.
Key levels for traders to monitor include:
- Resistance: 20-day EMA near $2,650.
- Support: 100-day EMA near $2,535.
If geopolitical tensions escalate further, gold may test higher levels, potentially aligning with forecasts from investment firms like Goldman Sachs.
Goldman Sachs Predicts Gold’s Long-Term Rally
Goldman Sachs remains bullish on gold, predicting it could reach $3,000 by 2025. Their optimism stems from increasing central bank demand and anticipated ETF inflows. The Federal Reserve’s expected rate cuts will also play a critical role in supporting gold’s long-term price stability.
Conclusion
The Gold price rally underscores its importance as a reliable safe-haven during global uncertainty. Investors closely monitor geopolitical developments, particularly Russia’s nuclear doctrine and U.S. policy moves, as potential drivers for further price movements.
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