Gold’s price trajectory has been notably bullish, with the precious metal nearing the significant $2,000/ounce threshold after achieving five-month highs last week. This surge is attributed to mounting concerns over prolonged high interest rates potentially hampering global economic growth. The yellow metal’s appeal has been further amplified as U.S. Treasury yields reached levels unseen in over a decade, with the 10-year T-note hitting 4.9% the previous week.

However, the start of this week saw a slight pullback in gold prices. The easing of geopolitical tensions in the Middle East, particularly between Israel and Hamas in the Gaza Strip, has reduced market risk aversion. This shift in sentiment has rejuvenated risk appetite, leading to a rise in risk assets and a corresponding dip in safe havens like gold and the U.S. Dollar.

Investors are now closely monitoring upcoming U.S. economic data, especially growth and inflation figures, to gauge the Federal Reserve’s potential rate decisions. Current market expectations lean towards the Fed maintaining interest rates, but any deviation in the anticipated inflation trajectory could compel the central bank to sustain elevated rates longer than previously thought.

From a technical perspective, gold remains in a strong bullish stance. Despite the recent dip, XAU/USD has risen over 10% since early October, starting from lows around $1,810. The precious metal is now challenging the $1,980 resistance level, which previously halted its upward momentum in July.