Gold prices experienced a significant surge on Monday, gaining over 1% as US Treasury bond yields retreated ahead of crucial economic data releases. The precious metal is trading at $2,467, having rebounded from a daily low of $2,423.
Rising geopolitical tensions in the Middle East, fueled by the ongoing conflict between Israel, Lebanon, and Iran, have driven investors towards the safe-haven asset gold. Concerns over a potential escalation in the region have boosted demand for the precious metal.
Meanwhile, US Treasury bond yields declined, with the 10-year benchmark note rate dropping four basis points to 3.902%. This decline comes ahead of the highly anticipated release of US inflation data.
Federal Reserve Governor Michele Bowman’s recent comments indicating potential progress in the fight against inflation have also contributed to the positive sentiment surrounding gold.
Economic Calendar and Market Outlook
The upcoming week is packed with economic data releases, with the US Consumer Price Index (CPI) and Retail Sales figures taking center stage. A softer-than-expected inflation reading could further bolster gold prices.
Technically, gold prices have broken above the $2,450 level, and the momentum is currently favoring buyers. The next resistance level is the all-time high of $2,483, followed by the psychological barrier of $2,500. However, if prices drop below $2,450, support levels at $2,400, the 50-day Simple Moving Average (SMA), and the 100-day SMA could come into play.
