Gold Gain on Russia-Ukraine Tension

• Gold extended gain as the geopolitical tension deteriorated in the Eastern Europe region. 
• The U.S. dollar eased in strength as the U.S. election sentiment waned. 
• BTC reached an all-time high yesterday on heightened optimism in the digital asset market. 

Market Summary

Gold extended its rally for a third consecutive session this week, gaining nearly 3% since Monday as the intensifying conflict between Russia and Ukraine drove safe-haven demand. Tensions escalated after Ukraine deployed U.S.-supplied missiles, prompting Russian President Putin to approve the use of nuclear deterrents in response.

Oil prices, meanwhile, remain at elevated levels but are facing resistance below the $70.00 mark, constrained by profit-taking at current highs. In the forex market, the dollar is under selling pressure as the initial boost from election-related sentiment fades. With few catalysts on the U.S. economic calendar this week, the dollar could be vulnerable to upward pressure in the near term. On the other hand, the euro received a lift from the recent eurozone CPI release, which aligned with market expectations and supported the currency's strength. Today’s focus will be on the UK's CPI data, which could impact the Pound.

In the cryptocurrency market, Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, reached a new all-time high and is trending in a higher-high pattern, indicating that BTC remains within a bullish trajectory.

Current rate hike bets on 18th December Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (32.2%) VS -25 bps (67.8%) 

Market Movements

DOLLAR_INDX, H4

The Dollar Index remained flat as the market absorbed the effects of the U.S. Presidential election. While economic data due later this week may influence the dollar’s trajectory, geopolitical uncertainties, including the escalating Russia-Ukraine war, could provide near-term support for the safe-haven greenback. Investors remain cautious, balancing economic indicators against geopolitical risks.

The Dollar Index is trading flat while currently testing the support level. MACD has illustrated diminishing bearish momentum. However, RSI is at 48, suggesting the index might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 107.00, 107.80

Support level: 106.05, 105.15

XAU/USD, H4

Gold prices extended gains as escalating tensions in the Russia-Ukraine war drove investors toward safe-haven assets. Ukraine’s use of long-range missiles to strike Russian military targets marked a significant shift in the conflict, prompting Moscow to escalate its nuclear rhetoric. North Korean troops bolstering Russian forces and President Zelenskiy’s calls for additional Western military aid have further intensified the situation. These developments, alongside Putin’s resistance to diplomatic talks, have heightened global uncertainty, bolstering gold’s appeal as a hedge against geopolitical risks.

Gold prices are trading higher following the prior breakout above the previous resistance level. MACD has illustrated diminishing bullish momentum. However, RSI is at 64, suggesting the commodity might extend its gains since the RSI stays above the midline. 

Resistance level: 2660.00, 2710.00

Support level: 2605.00, 2555.00

GBP/USD，H4

The GBP/USD pair has reached its previous high and is now testing a short-term resistance level near the 1.2710 mark. If the pair successfully breaks above this level, it would indicate a bullish signal, potentially paving the way for further gains. The UK’s CPI reading, scheduled for release today, is anticipated to show an increase compared to the prior month. A higher-than-expected CPI could boost the Pound, supporting its strength and adding momentum to the pair’s upward trajectory.

GBP/USD has rebounded from its recent low level and is trading in a higher-high price pattern, suggesting a potential trend reversal for the pair. The RSI is ticking higher while the MACD is moving toward the zero line from below, suggesting that the bearish momentum is easing. 

Resistance level: 1.2800, 1.2950

Support level: 1.2615, 1.2474

EUR/USD，H4

The EUR/USD pair is showing signs of a potential trend reversal as it rebounds from recent lows, now attempting to break through its next resistance level. The recent Eurozone CPI reading aligned with market expectations, hitting the ECB's 2% target, which has supported the euro’s strength. Should the U.S. dollar continue to ease in the upcoming sessions, the pair could maintain a bullish trend, supported by both technical momentum and eurozone fundamentals.

EUR/USD has rebounded; a break above its next resistance level at 1.0610 may be a bullish signal for the pair. The RSI is edging higher while the MACD is about to break above the zero line, suggesting the bearish momentum is vanishing. 

Resistance level: 1.0680, 1.0785

Support level: 1.0525, 1.0440

AUD/USD, H4

The AUD/USD pair is extending its rally from recent lows, approaching a potential breakout above its next resistance level at 0.6550. This upward momentum is bolstered by hawkish RBA meeting minutes released yesterday, reinforcing the Australian central bank’s commitment to its current monetary tightening path, which has strengthened the Aussie dollar. Additionally, the pair is benefiting from a softer U.S. dollar, providing further support for an upward move.

The pair has gained by more than 1% from its recent low level this week, suggesting a bullish bias. The RSI has broken above the 50 level while the MACD is on the brink of breaking above the zero line, suggesting that the bullish momentum is forming. 

Resistance level: 0.6550, 0.6610

Support level:  0.6500, 0.6420

NASDAQ, H4:

US equity market closed higher, underpinned by Nvidia’s (NASDAQ: NVDA) 4% surge ahead of its earnings report. As a bellwether for AI demand, Nvidia’s performance is expected to set the tone for tech stocks in the coming days. However, broader market gains were capped by investor concerns over rising geopolitical tensions. The ongoing Russia-Ukraine conflict, coupled with Putin’s heightened nuclear threat, limited risk appetite despite the tech-driven rally.

Nasdaq is trading higher following the prior rebound from the support level. MACD has illustrated diminishing bearish momentum, while RSI is at 51, suggesting the index might extend its gains since the RSI stays above the midline. 

Resistance level:  21105.00, 21955.00

Support level:  20395.00, 19860.00

BTC/USD, H4

Bitcoin (BTC) is currently trading above its uptrend support level and reached a new high in the last session, signalling a bullish outlook. This upward momentum is partly attributed to the "Trump trade" sentiment, with expectations that a Trump administration could ease restrictions on the cryptocurrency market, potentially fueling a bullish trend for BTC. Additionally, BTC ETFs saw one of the largest single-day net inflows yesterday, indicating rising confidence in the digital asset market among traditional investors.

BTC is trading in a high-high price pattern and has reached a new high, suggesting a bullish bias for BTC. The RSI remains close to the overbought zone while the MACD edge is lower, suggesting that the bullish momentum is easing. 

Resistance level: 96680.00, 101990.00

Support level: 88950.00, 85120.00

CL OIL, H4

Oil prices edged higher as traders weighed the restart of production at Norway’s Johan Sverdrup oilfield against escalating geopolitical tensions. Russia’s updated nuclear doctrine, which lowers the threshold for a nuclear response to conventional attacks, has added to market jitters. Ukraine’s strikes on Russia’s oil infrastructure, enabled by American long-range missiles, could further disrupt Moscow’s output. These risks, combined with OPEC’s production strategies, are keeping oil prices supported despite near-term supply stabilization.

Oil prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 69.90, 72.60

Support level: 66.90, 65.55