Gold Price Forecast: XAU/USD taps $1,960 in Wednesday safe haven bids

• Spot Gold climbed further on Wednesday, extending to $1,960 as investors reversed direction.
• Global geopolitical tensions and political instability in the US are seeing market jitters rattle risk assets.
• US Treasury yields continue to climb as investor's nerves shake out, 10-year hits highest yield since 2007.

Gold bids accelerated recent gains, climbing into the $1,960 handle as tensions over the Gaza Strip conflict and a hamstrung US Congress lacking a Speaker of the House give investors cause to pause, sending markets flowing back into safe havens.

XAU/USD is settling near $1,950 heading into the market close and remains up over 1.35% for Wednesday.

Gaza conflict, paralyzed US Congress weigh on risk appetite

An explosion rocked a Gaza hospital this week leaving over 500 civilians dead that were seeking refuge in the building as the Israel-Hamas conflict continues to escalate; Hamas claimed Israel had performed a targeted air strike on the building, while Israel blames a runaway errant Hamas rocket for the building demolition.

Market participants remain uneasy about the Gaza escalation after Iranian Finance Minister Ehsan Khandouzi recently stated that Iran would not remain a passive observer if "crimes in Gaza continue", aiming criticism at Israel and the US by extension.

On the US side, the US Congress remains hamstrung and frozen on federal action as Congress failed to elect a new Speaker of the House, with two votes in two days failing to elect a successor after the former Speaker of the House Kevin McCarthy was ousted from his position by his own Republican party two weeks ago.

The deadline on a temporary funding stopgap is set to unwind in four weeks' time, and investors are growing increasingly agitated as Congress continues to float dead in the water, unable to select a new Congressional speaker. US Treasury yields have climbed, with the 10-year T-note hitting a high of 4.928% on Wednesday.

XAU/USD Technical Outlook

Spot Gold extended over the 200-day Simple Moving Average for Wednesday while also breaking through the descending trendline from May's swing high of $2,079.76.

XAU/USD has climbed rapidly in recent weeks, lifting over 7.5% from early October's swing low into $1,810.

Gold bulls will be looking to turn old resistance into support from the $1,940 level, while the $1,900 major psychological handle will hopefully turn into a major bidding platform now that XAU/USD has decisively climbed over the level.

XAU/USD Daily Chart

XAU/USD Technical Levels