Gold price attracts some haven flows in the wake of geopolitical tensions in the Middle East.

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• Gold price attracts some haven flows in the wake of geopolitical tensions in the Middle East.
• Hawkish FOMC minutes remain supportive of elevated US bond yields and cap further gains.
• A sustained move beyond the 50-day SMA should pave the way for additional near-term upside.

Gold price (XAU/USD) edges higher during the Asian session on Thursday, albeit remains below the 50-day Simple Moving Average (SMA) pivotal resistance, around the $2,032 area, or over a one-week high touched the previous day. The Middle East conflict continues to underpin demand for traditional safe-haven assets, which, along with a weaker US Dollar (USD), acts as a tailwind for the precious metal. The uptick, however, lacks bullish conviction in the wake of firming expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.

The bets were reaffirmed by hawkish FOMC meeting minutes released on Wednesday, which showed that policymakers were concerned about cutting interest rates too quickly. This, along with a weak 20-year bond auction, triggered a sell-off in the US debt market and pushed the yield on long-term US government bonds to their highest level in almost three months. This might hold back traders from placing aggressive bullish bets around the non-yielding Gold price and cap the upside, warranting caution before positioning for an extension of a one-week-old uptrend.

From a technical perspective, bulls need to wait for sustained strength and acceptance above the 50-day SMA before positioning for any further gains. With oscillators on the daily chart just starting to gain positive traction, the Gold price might then accelerate the momentum towards an intermediate hurdle near the $2,044-2,045 region en route to the $2,065 supply zone.

On the flip side, the $2,020 area now seems to protect the immediate downside ahead of the 100-day SMA, currently pegged near just below the $2,000 psychological mark. Some follow-through selling will expose the monthly low, around the $1,984 region, before the Gold price eventually drops to challenge the very important 200-day SMA support near the $1,966-1,965 zone.

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