• Silver price climbs to near $29.80 amid renewed geopolitical tensions.
• US Joe Biden discusses possible ways to strike on Iran’s nuclear facility.
• Investors expect the Fed to leave interest rates unchanged in the policy meeting this month.

Silver price (XAG/USD) rises further to near $29.80 in Friday’s European session. The white metal gains as demand for safe-haven assets has improved on renewed geopolitical tensions. According to reports from Axios, US President Joe Biden discussed possible strikes on Iran’s nuclear facilities with his national security team, with few weeks remaining for President-elect Donald Trump to take administration.

Axios reported that White House National Security Advisor Jake Sullivan presented President Biden with options for a potential US attack on Iran’s nuclear sites. Historically, demand for safe-haven assets, such as Silver, improves in heightened geopolitical uncertainty.

Additionally, prospects of high inflation under the administration of Trump, as he is expected to tighten immigration controls, elevate import tariffs, and lower taxes, have also strengthened safe-haven demand. Silver tends to face high demand as investors use it as a hedge against inflation.

Meanwhile, the US Dollar (USD) edges down on Friday after a sharp rally on Thursday, with investors focusing on the US ISM Manufacturing PMI data for December, which will be published at 15:00 GMT. The Manufacturing PMI is estimated to have remained unchanged at 48.4, suggesting that factory activities contracted steadily.

10-year US Treasury yields drop to near 4.55% even though the Federal Reserve (Fed) is certain to pause the current policy-easing spell in the policy announcement on January 29.

Silver technical analysis

Silver price rebounds to near the 20-day Exponential Moving Average (EMA), which trades around $29.85. However, the outlook of the white metal remains bearish till it stays below the upward-sloping trendline, which is plotted from the February 29 low of $22.30 on a daily timeframe.

The 14-day Relative Strength Index (RSI) rebounds above 40.00. A bearish momentum would come to an end if it sustains above that level.

Looking down, the September low of $27.75 would act as key support for the Silver price. On the upside, the 50-day EMA around $30.90 would be the barrier.

Silver daily chart

Created on January 03, 2025

• One of the things that we will talk about in the early part of 2025 is going to be energy.
• After all, energy had been beaten up pretty severely during most of 2024, and this can be plainly seen in the West Texas Intermediate Crude Oil market.
• That being said, the last several sessions have been very bullish, and I think we are onto something here.

Taking further upward pressure to the market is the fact that the Crude Oil Inventories in the United States came in at -1.2 million, suggesting that we are starting to see continued energy demand.

New year, new America

Keep in mind this year is going to be interesting for America, as the incoming administration is very pro-business, and is likely to do everything it can to spur economic growth. This should drive up demand for energy, as of course the crude oil market is the “life’s blood” of economic activity. Because of this, it makes perfect sense that we are starting to see energy breakout, and it’s probably worth noting that the spot US Oil contract has broken above the crucial $72.50 level.

The only thing left at this point for the Bears to hang onto is the fact that the 200 Day EMA has offered a little bit of resistance, but quite frankly I don’t see any reason why it will hold. If we can break above the highs of the trading session on Thursday, then I suspect that crude oil continues to go much higher, probably aiming toward $80 before it is all said and done. However, it would make a certain amount of sense for the market to pull back toward the $72.50 level again, looking for some type of confirmation on the breakout via a pullback and bounce.

The size of the candlestick is somewhat impressive, and of course traders have come back to work, at least in a certain number, and therefore it does make sense that we would see more activity in this market. After all, I’ve been saying for weeks that it looks like we are building a basing pattern, and Thursday looks like it does in fact confirm that.

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Created on January 03, 2025

• The natural gas markets were somewhat noisy during the early hours on Thursday, which is not surprising considering the massive move higher that we’ve seen over the last couple of weeks, and the lack of liquidity.
• With all that being said, I think you’ve got a situation where traders will have to look at this through the prism of whether or not they can find value.

I suspect at this point we are trying to price in those colder than anticipated temperatures in the United States coming with that Arctic blast. But I think you also have to keep in mind that the futures traders out there will be looking towards spring before you know it. So, I think we only have maybe one or two more pullbacks and bounces for the rest of the season.

Pullbacks? Please.

I do like the idea of buying a pullback if we get it. We did not quite fill the gap from earlier this week, but we’ve gotten pretty close. So, I think that’s probably close enough for government work as it were. I do think that if we can overtake the $4 level in the spot market, that opens up a potential move all the way to the $4.50 level followed by $5. I don’t like the idea of chasing the market with a huge position though. I’d be much more comfortable buying a dip closer to $3.50 with a bigger position. But I recognize that at this time, it’s obvious natural gas is breaking out.

The question is, will it have any follow through? I suspect the answer is probably yes before it’s all said and done, but the next week is going to be very erratic as we try to price in more liquidity, and of course, the idea of temperatures plummeting in the United States because they can turn around just as quickly. And if that happens, natural gas falls. There is the outlier of Europe though, and Russian gas not flowing through Ukraine, of course has somewhat of an influence as Europeans will be buying LNG from the United States, but really at this point in time, I don’t know if that is as much of a factor as the weather in New England, for example.

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• Silver price receives support from safe-haven demand amid increased geopolitical tensions.
• US President Joe Biden reportedly explored contingency plans to target Iran’s nuclear facilities
• The industrial use of grey metal could advance as traders expect an economic recovery in China.

Silver price (XAG/USD) extends its gains for the third successive day, trading around $29.60 per troy ounce during the Asian hours on Friday. This sustained rally is attributed to strong safe-haven demand amid persistent geopolitical tensions in the Middle East and the prolonged Russia-Ukraine conflict.

Axios referenced three sources, indicating that US President Joe Biden reportedly explored contingency plans to target Iran’s nuclear facilities if Tehran advanced significantly in developing a nuclear bomb before Donald Trump’s inauguration on January 20. These talks underscore the growing concerns over Iran’s nuclear aspirations during the transition between administrations.

Reuters cited that Russia launched a drone strike on Ukraine’s capital, Kyiv, on New Year’s Day early Wednesday, resulting in two deaths, at least six injuries, and damage to buildings in two districts. Meanwhile, the Israeli military maintained pressure on northern Gaza, and carried out strikes in a suburb of Gaza City on Wednesday, according to medics. Airstrikes in Shejaia, a suburb of Gaza City, killed at least eight Palestinians.

A Financial Times report noted that the People’s Bank of China (PBoC) anticipates an interest rate cut this year at an appropriate time. Traders are closely monitoring the potential recovery in China’s economy and its effect on the industrial demand for Silver. President Xi Jinping reaffirmed his commitment on Tuesday to prioritizing economic growth, promising more proactive policies to bolster China’s economy in 2025.

While China’s manufacturing activity showed minimal growth in December, services and construction sectors have recovered. The data indicates that policy stimulus is beginning to impact certain sectors, as China prepares for new trade risks stemming from tariffs proposed by US President-elect Donald Trump.

• Gold price consolidates a two-day upsurge above $2,650 early Friday.        
• The US Dollar stalls its uptrend amid sluggish US Treasury bond yields and a cautious mood.
• Gold price cheers geopolitical woes and a bullish daily RSI as buyers scale all key technical hurdles.

Gold price is holding close to the two-week high of $2,664 early Friday as buyers take a breather after gaining about 1.5% so far this week.

Gold price eyes more upside amid geopolitical risks

Gold price benefitted alongside the US Dollar (USD) on the first trading day of the New Year as investors flocked to safe havens amid escalating geopolitical conflicts and increased tensions surrounding the upcoming policies from the US President-elect Donald Trump and the US Federal Reserve (Fed).

Expectations that Trump’s protectionist policies could spur fresh US-Sino trade tensions and the haven demand for Gold price. However, his policies are seen as inflationary and could prompt the Fed to maintain its cautious approach to future rate cuts. The Fed’s measured stance could check the upside in the non-interest-bearing bright metal.

Meanwhile, Gold traders created fresh buying positions after Reuters reported that Israeli airstrikes killed at least 68 Palestinians in Gaza, including the Hamas-controlled police chief, his deputy, and nine displaced people. “Additionally, Russia launched a drone strike on the Ukrainian capital Kyiv early on Wednesday, causing damage in at least two districts,” Reuters said.

Moreover, Axios reported that outgoing US President Biden was presented with options for a potential attack on Iran’s nuclear facilities if Tehran moves towards a nuclear weapon before January 20.

Markets also digested the strong US jobs data, which showed that the Initial Jobless Claims hit an eight-month low last week, falling by 9,000 to 211,000 versus 222,000 estimated. However, the data appeared distorted due to the year-end holiday season.

The focus now shifts toward the top-tier US ISM Manufacturing PMI data and a speech by Richmond Fed President Tom Barkin due later on Friday for some fresh trading incentives for Gold price.

However, the broader market sentiment amid lingering Middle East geopolitical tensions and China’s economic worries will continue to play a pivotal role in the Gold price action.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) has recaptured the 50 level, opening up further upside for Gold price.

Thursday’s Gold price rally took out all key major daily Simple Moving Averages (SMA), with the price closing above the critical 50-day SMA, then at $2,655.

If buyers regain traction, the next relevant upside target aligns at the $2,700 round level, above which the December 12 high of $2,726 will be challenged.

On the flip side, the immediate support is at the previous resistance of 21-day SMA at $2,638 if the 50-day SMA, now at $2,653, gives way.

A daily candlestick close below the latter will negate the recovery momentum, fuelling a fresh downtrend toward the weekly low of $2,596.

Created on January 02, 2025

• On the last day of trading in 2024, it looks like the West Texas Intermediate Crude Oil market is going to continue to be positive, but we have a massive amount of resistance just above, and therefore I think it makes a certain amount of sense that although we are bullish, we are a little bit hesitant.
• When I look at this chart, there are a lot of things just above that could cause us a bit of a headache if we do start buying.

Resistance Above

The resistance above is most obviously seen at the $72.50 level, as it has been a major barrier previously. Furthermore, we also have the 200 Day EMA sitting just above there, and it is dropping. With that being said, the market is likely to continue to see a lot of short sellers coming into the market in trying to step on the crude oil market. However, I think that there is only so much resistance it will be seen, and I do fully anticipate that this market will break out to the upside over the longer term.

Short-term pullbacks I believe end up being a nice buying opportunity with the 50 Day EMA, sitting right around the $70 level. If we were to break down below that level, then you could have a situation where traders trying to find value at lower levels, but right now I thesis is basically the market trying to find buyers on each and every dip, as it gives us an opportunity to pick up a little bit of “value” in a market that has been forming a large basing pattern for some time. Quite frankly, I like the idea of buying this market on dips, as I do believe that with the explosion of risk appetite next year would drive the demand for oil in the United States. Remember, the WTI Crude Oil market is heavily influenced by America, and America is still roaring ahead.

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• Gold price trades flat around $2,660 in Friday’s early Asian session.
• Safe-haven demand and buying by global central banks lift the Gold price. 
• The expectation of a slower pace of the US interest rate reduction might cap the upside for the yellow metal.

The Gold price (XAU/USD) consolidates its gains near $2,660 after reaching a two-week high during the early Asian session on Friday. The safe-haven flows amid the geopolitical tensions provide some support to the precious metal. The US ISM Manufacturing Purchasing Managers Index (PMI) for December will take center stage later on Friday. Also, the Richmond Fed President Thomas Barkin is scheduled to speak.

Russia carried out a drone attack on Kyiv early Wednesday, causing damage in two districts, while Israel targeted a Gaza City neighbourhood, per Reuters. Investors will closely monitor the development surrounding geopolitical risks. Any signs of escalating tensions in the Middle East and Russia-Ukraine could boost the Gold price, a traditional safe-haven asset. 

Central bank purchasing activities could contribute to the yellow metal’s upside. Global central banks bought 694 tonnes of gold during the first nine months of 2024. “We think central bank interest will be a strong base for the buying next year,” noted Henrik Marx, global head of trading at Heraeus Precious Metals, which expected that gold could reach highs of $2,950 per troy ounce in 2025. 

On the other hand, the slower pace of further rate cuts by the US Federal Reserve (Fed) might weigh on the non-yielding asset. The US central bank decided to lower the interest rates in December but signalled that borrowing costs will fall more slowly than previously expected this year. 

Underlying Demand Remains but Correction Risk Grows

Since natural gas continues to retain support around the prior resistance level, which reflects underlying demand, it remains in a position to potentially continue the rising trend before a deeper pullback. However, there is one more trading day to the week and the current weekly candlestick pattern is showing a bearish shooting star. This is bearish if triggered to the downside. But since the week is not yet complete another day is needed to see if the bearish pattern remains. Today’s low at 3.54 is currently the low for the week.

No Surprise if there is a Deeper Pullback

A new high for the rising trend was established at this week’s high of 4.20. It was quickly met with stronger resistance, which led to weak close on the new high day, as sellers moved to take back control. They remained in control on Tuesday as seen by the weak close. Today is the second day showing a lower daily high and lower low.

If natural gas sees further weakness, there are several price areas to watch for potential support. The 20-Day MA at 3.46 is next in line on the downside. It can be watched along with the rising internal trendline, along with the 78.6% retracement and most recent swing low at 3.28.

Bearish Reaction Following 4.20 Trend High

Given the bearish reaction following the 4.20 trend high it wouldn’t be surprising to see more of a pullback and/or consolidation before natural gas is ready to proceed higher, if it is to do so. And given the recent long-term bullish signal as noted above, triangle breakout and long-term trend continuation signals, once a correction is complete higher target remain a possibility of being reached. However, a sustained drop below the 3.29 swing low would put the bullish scenario at risk in the near-term.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $2,653.70

• Market players started the new year, dropping high-yielding assets amid persistent uncertainty.
• Central banks’ hawkishness and political uncertainty undermine the market’s mood.
• XAU/USD is reaching overbought conditions in the near term, but buyers are unlikely to give up.

Spot Gold trades around $2,650 a troy ounce as market players slowly return to their desks in the New Year holiday aftermath. Investors started the year dropping high-yielding assets, expressing their concerns about what the new year may bring.

Speculation that central banks may keep slowing the pace of interest rate cuts amid stubborn inflation are among the main themes. Geopolitical tensions are also at the top of the list after Ukraine interrupted the flow of Russian gas to several European countries after a former agreement ended on New Year’s Day, with Ukraine refusing to renew it.

Meanwhile, a risk-averse environment dominates the scenes. United States (US) indexes started the day with a positive tone but quickly dipped in the red, sending investors into safe-haven Gold.

XAU/USD short-term technical outlook

XAU/USD peaked at $2,655.68 and holds nearby in the mid-American session. From a technical point of view, the daily chart shows that the positive momentum is not enough to confirm additional gains, yet also that bulls dominate the bright metal. XAU/USD currently trades above all its moving averages, recovering above a flat 20 Simple Moving Average (SMA) after finding buyers around a bullish 100 SMA. Technical indicators, in the meantime, have pared their slides and turned marginally higher, albeit with uneven strength and still far from reflecting strong buying interest.

In the near term, and according to the 4-hour chart, however, XAU/USD is firmly bullish. The Momentum indicator heads north almost vertically well above its 100 line, while the Relative Strength Index (RSI) indicator advances around 70. Finally, the pair has moved above all its moving averages, although they lack directional strength. Gold needs to settle above $2,664.27, December 16 high, to convince speculative interest it could re-test record highs.

Support levels:  2,639.15 2,621.60 2,607.30

Resistance levels: 2,664.30 2,678.85 2,691.60

• Gold price gains to near $2,650 as investors expect heightened global uncertainty under Trump’s administration.
• US Trump is expected to raise import tariffs and lower taxes after joining the White House.
• The US Dollar refreshes two-year higher on lower Initial Jobless Claims in the week ending Dec 27.

Gold price (XAU/USD) extends intraday gains to near $2,650 in the opening North American session on Thursday after the New Year holiday. The precious metal strengthens as its safe-haven appeal as improved, with investors focusing on President-elect Donald Trump taking administration on January 20.

Expected incoming policies from Trump, such as higher import tariffs and lower taxes, will be beneficiaries of the Gold. Higher import tariffs would lead to a potential global trade war and lower taxes will boost inflationary pressures in the United States (US). Gold tends to perform better amid economic uncertainty as a safe-haven bet and higher price pressures, given that investors use the precious metal as a hedge against inflation.

10-year US Treasury yields decline to near 4.54% at the start of the year as the rally stalls. Generally, lower yields on interest-bearing assets result in lower opportunity costs for non-yielding assets, such as Gold, and make them an attractive bet.

Meanwhile, the US Dollar (USD) also gains sharply as investors expect high inflation under Trump’s administration will force the Federal reserve (Fed) to adopt a moderate policy-easing approach. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh two-year high at 108.90.

On the economic front, fewer US Initial Jobless Claims for the week ending December 27 have also strengthened the US Dollar. The Department of Labour reported that individuals claiming jobless benefits for the first time were 211K, lower than estimates of 222K and the former release of 220K.

Gold technical analysis

Gold price trades in a Symmetrical Triangle chart formation on a daily timeframe, which exhibits a sharp volatility contraction. The 20-day Exponential Moving Average (EMA) near $2,630 broadly overlaps Gold’s price, suggesting a sideways trend.

The Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating indecisiveness among market participants.

Looking up, the Gold price would strengthen after a decisive break above the December high of $2,726.00. On the contrary, bears would strengthen if the asset breaks below the November low around $2,537.00.

Gold daily chart