Gold Prices Rally on Fresh Red Sea Attacks

Middle Tensions Supporting GoldGold prices remain in the green across early European trading on Monday, extending gains from Friday. Risk sentiment remains subdued amidst ongoing global geopolitical unrest. News of a US warship shooting down an attempted missile strike from Houthi rebels has prompted fears of fresh US/UK strikes in Yemen, further raising risks of a broader conflict developing in the region. Israel has vowed to continue its war against Hamas while the Houthis have promised to continue their attacks in the Red Sea while the war continues. With risk sentiment vulnerable to downside shocks on news of any fresh attacks, gold prices look likely to continue to find safe-haven support near-term.China Data in FocusLooking ahead this week, gold traders will be watching a slew of key economic data with UK CPI, US retail sales and China Q4 GDP all due across the week. Overnight, the PBoC bucked expectations by keeping its medium-term policy rate steady, despite traders widely pegging the bank to cut rates further in a bid to help bolster the economy. Any fresh weakness in China data this week will no doubt weigh on risk sentiment further, supporting gold.1st Republican Caucus TodayFinally, traders will be keeping an eye on the US Republican caucus in Iowa later today with polls showing Trump is firmly placed to win the event. If confirmed, this will greatly increase his chances of succeeding as the 2024 presidential candidate, no doubt causing plenty of ripple effects across markets.Technical ViewsGoldGold prices remain capped for now by the 2069.41 level resistance. The bull channel from 2023 lows continues to underpin the market, however, keeping focus on a fresh move higher. To the topside, 2151.15 will be the next target for bulls. To the downside, 1973.51 is the key support to note.