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      Will Sino-Japanese Tensions Drive Gold to Record Highs?

      Alan

      Commodity

      Summary:

      Safe-haven flows amid rising Sino-Japanese tensions are propelling gold higher.

      Buy

      XAUUSD

      EXP
      Trading

      4159.51

      Entry Price

      4340.00

      TP

      4105.00

      SL

      4219.54 +61.66 +1.48%

      0

      Point

      Flat

      4105.00

      SL

      CLOSING

      4159.51

      Entry Price

      4340.00

      TP

      Fundamentals

      The immediate catalyst for the current leg of gold strength is not a single factor, but the entanglement of three strands: geopolitics, liquidity and rate expectations.
      As the Japanese government has hardened its rhetoric on Taiwan and China has escalated both verbal and substantive counter-measures, market concern over military and trade tail-risk in Asia has risen markedly. Press reports and official statements show Beijing issuing severe warnings to Tokyo. The bilateral tension feeds almost instantaneously into risk premia. When risk appetite deteriorates, gold is traditionally the safe-haven asset of first resort, prompting a pronounced spike in spot buying.
      This flight-to-quality coincides with an already dovish global rate outlook: the market has materially increased the probability of a December Fed cut. Any further decline in real yields would reduce the opportunity cost of holding bullion, reinforcing its appeal. Numerous market flashes and technical notes argue that the concurrent pull-back in the USD and Treasury yields provides a "soft floor" for gold, amplifying the price response when geopolitical headlines hit.
      Finally, positioning and institutional flows are magnifying the move. Against the backdrop of sustained accumulation by central banks and large asset managers over recent months, even a short-term risk event is enough to unleash sizeable ETF and institutional bids, turning a headline shock into a sustained uptrend.

      Technical AnalysisWill Sino-Japanese Tensions Drive Gold to Record Highs?_1

      From the 4-hour chart perspective, gold has today made a strong breakout from the triangular consolidation range, with short-term bullish momentum significantly reinforced. The primary target for gold will be an upward test of the 4245 resistance level. Should this level be decisively breached, further upside potential will be unlocked, opening the way for gold to set a fresh record high.

      Trade Recommendations

      Trade Direction: Buy
      Entry Price: 4180.00
      Target Price: 4340.00
      Stop Loss: 4150.00
      Valid Until: December 12, 2025, 23:00:00
      Support: 4173.43/4158.05
      Resistance Levels: 4245.09/4300.00
      Risk Warnings and Investment Disclaimers
      You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

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