Gold Price Forecast (XAU): Will Bulls or Bears Dominate in the $2,629-$2,607 Range?

Gold’s overall trend remains bearish after breaking a key support level at $2604.39 earlier this month. This move created a downside pattern in the $2,790.17 to $2,536.85 range and established a primary retracement zone at $2,663.51 to $2,693.40.

The current short-term range of $2,536.85 to $2,721.42 defines another retracement zone between $2,629.13 to $2,607.35.

After rising to $2,721.42 last week, gold prices fell below the primary retracement zone and found short-term support.

A sustained rise above $2,629.13 could trigger a counter-trend rally targeting $2,663.51, while a break below $2,607.35 could lead to further declines towards the main support area near $2,546.86 to 2,536 .85 US dollars.

Geopolitical optimism weakens demand for safe havens

Demand for safe-haven gold weakened on Tuesday following reports of possible ceasefire talks between Israel and Hezbollah, sparking optimism on geopolitical tensions. The prospect of a solution dampened the appeal of gold bars despite general economic uncertainty.

Monday’s selloff was further weighed down by news that President-elect Donald Trump’s nominee for Treasury secretary, Scott Bessent, could signal a pro-business stance. Trump’s threats of tariffs against Canada, Mexico and China have not yet significantly strengthened gold’s safe-haven appeal, as potential inflation risks create uncertainty about the Federal Reserve’s monetary policy.