Gold price retains its bullish bias near one-week high amid rising geopolitical risks

• Gold price attracts buyers for the fourth consecutive day and climbs to over a one-week high.
• Geopolitical risks stemming from the Russia-Ukraine conflict benefit the safe-haven XAU/USD.
• Elevated US bond yields could underpin the US Dollar and cap the non-yielding yellow metal.

Gold price (XAU/USD) maintains its bid tone heading into the European session and currently trades around the $2,660 level, or a one-and-half-week high touched earlier this Thursday. This marks the fourth straight day of a positive move and is sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war, which benefits the safe-haven precious metal. Apart from this, a modest US Dollar (USD) downtick further acts as a tailwind for the commodity. 

That said, elevated US Treasury bond yields, bolstered by expectations that US President-elect Donald Trump's proposed tariffs could spur inflationary pressures and limit the scope of the Federal Reserve (Fed) to cut interest rates, caps the non-yielding Gold price. Furthermore, the prevalent risk-on mood – as depicted by a generally positive tone around the equity markets – warrants some caution before placing aggressive bullish bets around the safe-haven XAU/USD. 

Gold price bulls retain short-term control as Russia-Ukraine tensions fuel safe-haven demand

• Geopolitical tensions intensified after Russian President Vladimir Putin lowered the threshold for nuclear strikes and underpinned the safe-haven Gold price for the fourth straight day on Thursday.
• Investors seem convinced that US President-elect Donald Trump's proposed expansionary policies could accelerate inflation and force the Federal Reserve to slow the pace of its rate-cutting cycle. 
• Moreover, a slew of influential Fed officials recently cautioned on further policy easing, which remains supportive of elevated US Treasury bond yields and keeps the US Dollar near the YTD high.
• Lisa Cook, a member of the Federal Reserve Board of Governors, noted on Wednesday that the central bank might get forced into a pause on interest rate cuts if inflation progress slows down.
• Separately, Fed Governor Michelle Bowman said that the progress on inflation appears to have stalled and that the US central bank should pursue a cautious approach to monetary policy.
• Meanwhile, Boston Fed President Susan Collins said that more interest rate cuts are needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly.
• According to the CME Group's FedWatch Tool, traders are currently pricing in just over a 50% chance that the Fed will lower borrowing costs at its December monetary policy meeting. 
• The yield on the benchmark 10-year US government advanced by the most in a week on Wednesday, which, along with a positive risk tone, might cap the safe-haven precious metal.
• Thursday's US economic docket features the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales data later during the North American session.
• Investors will also scrutinize speeches from Fed policymakers for cues about the future rate-cut path, which will drive the USD and provide some impetus to the non-yielding XAU/USD. 

Gold price could appreciate further towards the next relevant hurdle near the $2,670-$2,672 region

From a technical perspective, the intraday move-up faces some resistance near the 50% retracement level of the recent pullback from the all-time peak touched in October. The said barrier is pegged near the $2,660 area, above which the Gold price could accelerate the momentum towards the $2,670-2,672 congestion zone. Some follow-through buying could allow the XAU/USD to aim at reclaiming the $2,700 round figure. 

On the flip side, the $2,635-2,634 area, or the 38.2% Fibonacci retracement level, now seems to protect the immediate downside ahead of the $2,622-2,620 region and the $2,600 round figure. A convincing break below the latter could make the Gold price vulnerable and expose the 100-day Simple Moving Average (SMA), around the $2,557 region, with some intermediate support near the $2,570 zone. This is followed by last week’s swing low, around the $2,537-2,536 area, which if broken decisively will be seen as a fresh trigger for bearish traders and set the stage for deeper losses.