- Summary:
- A spike in war rhetoric among the US, Russia and Ukraine has given gold price a lifeline that makes Goldman Sach's $3k price target likely.
Gold price continued with its newfound momentum on Wednesday, rising for the third straight day. Spot gold traded at $2,644 per ounce at press time, having risen by 0.4 percent on the day. The yellow metal’s fortunes are boosted by the rising geopolitical tensions in the Russia-Ukraine war after the United States authorised Ukraine to use its long-range missiles and Russia lowered its nuclear threshold in response.
Safe haven gold performs well in times of heightened tensions as a result of its hedge against inflation and universal acceptability. Gold prices had not risen for two successive days since Donald Trump’s win, but the prospect of a widening conflict, with nuclear threat has raised the stakes.
Goldman Sachs raised its price target for gold to $3,000 by December 2025 over the weekend, underlining the bullishness around the metal. However, gold’s upside will be constrained by rising US treasury bond yields. Returns on benchmark 10-year bonds were up by 35 basis points to 4.414 at the time of writing, exerting downward pressure on non-yielding gold.
Also, Nvidia’s Q3 earnings could trigger a stock market rally and put a lid on safe haven gold. US monthly Home Sales data and Initial Jobless Claims figures will be out on Thursday, and will inject fresh impetus into the XAUUSD trading pair.
Gold price prediction
Gold price pivots at 2,640, with the buyers in control as signaled by the Relative Strength Index (RSI) indicator. That will likely see movement to the first resistance at 2,649. However, if the momentum strengthens, the price could breach that mark and test 2,655.
Alternatively, moving below 2,640 will favour the sellers to take control, with the first support likely to be at 2,633. However, extended control by the sellers could break below that level, invalidating the upside narrative. Also, that could establish the second support at 2,627.
