• 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.

Ready to trade the daily crude oil Forex forecast? Here’s a list of some of the best Oil trading platforms to check out. 

• 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

• Gold price extends the rebound from the $2,600 area, setting off 2025 on Thursday.        
• The US Dollar stands tall amid a cautious risk tone and sluggish US Treasury bond yields.
• Gold price looks to $2,650 on a firm break above the 21-day SMA as RSI prods the 50 level.

Gold price is trading on the front foot, kicking off 2025 on Thursday. Gold buyers appear defiant amidst a broad-based US Dollar (USD) strength, targeting $2,650 on an extended rebound from the $2,600 key level.

Gold price sees a positive 2025 start

The USD benefits from a risk-averse market environment as investors remain wary of the upcoming policies from US President-elect Donald Trump and the US Federal Reserve’s (Fed) next policy action. The Fed leaned in hawkish at the December policy meeting, lifting bets for a pause in its interest-rate-cutting cycle this month.

Despite a strong Greenback, a pause in the US Treasury bond yield recovery seems to be aiding the Gold price upside, also as markets scurry for safety in the traditional safe-haven asset due to looming China’s economic concerns and geopolitical risks, mainly in the Middle East.

The expansion in China’s factory activity slowed in December, Caixin PMI showed Thursday. China’s Caixin Manufacturing PMI unexpectedly declined to 50.5 in December after November’s 51.5, missing the expected 51.7 figure.

Further, Gold price draws support from increased expectations of more proactive Chinese policies to promote growth in 2025. China is the world’s biggest Gold consumer.

Risk trends and the US Dollar price action will continue to drive the Gold price direction, with the moves likely to be exaggerated amid holiday-thinned markets. However, the return of the US traders after the New Year holiday break could affirm the US Dollar uptrend, capping the Gold price upbeat momentum.

The weekly US Jobless Claims data could infuse some volatility into markets as traders gear up for another eventful year.

Gold price technical analysis: Daily chart

The daily chart shows that Gold price is challenging the 21-day Simple Moving Average (SMA) of $2,635 on the road to recovery.

The 14-day Relative Strength Index (RSI) prods the 50 level, failing to boost Gold price further.

Acceptance above the 21-day barrier could call for a test of the $2,650 psychological level and the 50-day SMA at $2,655.

The next relevant upside target aligns at the $2,700 round level.

On the flip side, the immediate support is at the previous resistance of 100-day SMA at $2,624.

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

Further down, the December 19 low at $2,583 and the November 15 low at $2,555 could be threatened.  

• Gold price holds positive ground to near $2,625 in Thursday’s early Asian session. 
• Geopolitical risks, central bank buying, and safe-haven flows might boost the Gold price. 
• The expectation of a slower pace of the Fed rate cut might cap the upside for the yellow metal. 

Gold price (XAU/USD) trades with mild gains to around $2,625 during the early Asian session on Thursday. The uncertainties around Donald Trump’s tariff policies, geopolitical risks, and central bank buying support the yellow metal. Nonetheless, the cautious stance of the US Federal Reserve (Fed) might cap the Gold’s upside. 

Traders awaited fresh catalysts that could influence the Fed’s interest rate outlook this year. In December, Fed Chair Jerome Powell signaled a cautious stance on further rate cuts after delivering a 25 basis points (bps) reduction. This, in turn, could provide some support to the Greenback and undermine the USD-denominated commodity price. 

The release of the US weekly Initial Jobless Claims on Thursday might offer some hints about the US labor market condition, On Friday, the US S&P Global Manufacturing PMI for December will be in the spotlight. 

On the other hand, the uncertainties surrounding policies from incoming President Donald Trump could lift the precious metal. Additionally, geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict are expected to remain high this year, which could boost the safe-haven flows, benefiting the Gold price. 

An increase in global central banks gold demand might contribute to the precious metal metal’s upside. According to the World Gold Council survey, major central banks are likely to purchase more Gold in the next 12 months. This should further bolster demand for the yellow metal. 

Natural Gas Outlook

As we close out the year, the latest headline is that there is a nasty arctic blast coming to the US that will drive up demand for a couple of weeks. Here in lines the conundrum of trading natural gas for retail traders. They have to focus on the next 10 days. You have to know the amount of storage, the amount of transmission across lines, the amount of exports to Asia, and now possibly the European Union, as it looks like natural gas won’t be flowing through Ukraine anymore from Russia. So, with all these things combining, you would assume that natural gas should shoot straight up in the air, and it has to a point, but the candlestick you’re looking at on the weekly chart is a result of low liquidity as well. So, you can only read so much into it.

As a cyclical trade, natural gas typically does fairly well through the month of January and I think this year will be more of the same. But sometimes towards the end of Q1, you’ll see natural gas plummet, unless, of course, something changes out of the ordinary. I think you’ve got a situation where we probably pull back in the very first few sessions of Q1, have another bounce, and that bounce is when I would be very cautious about getting long of natural gas again.

• Gold prices on course to end 2024 with a 27% gain, the best yearly performance since 2010.
• 2025 outlook is positive due to geopolitical risks, central bank buying, and safe-haven demand.
• Trump administration policies present both risks and opportunities for gold prices.
• Technical analysis shows potential for further gains, but a deeper correction before reaching new highs is possible.

Most Read: EUR/USD Tug-of-War Continues, US Dollar Index (DXY) Steady

Gold prices slipped yesterday as a stronger US Dollar, anticipation of a hawkish Fed and thin liquidity all contributed. Uncertainties around tariffs and challenges in 2025 are keeping the precious metals appeal going for now and capping further losses.

Gold prices are on track to end the year with a remarkable 27% increase, marking their best yearly performance since 2010.

Currency Strength Chart: Strongest – Weakest – JPY, GBP, EUR, AUD, CHF, USD, NZD, CAD – 

Source: FinancialJuice (click to enlarge)

2025 Outlook For Gold

Looking at the year ahead and 2025 and it will no doubt be interesting. Geopolitical risk remains a threat with the Middle East still on edge and the Russia-Ukraine situation no closer to a resolution. Just yesterday there were rumors that a proposal by the incoming Trump administration to delay Ukraine joining NATO by 10 years will not be accepted by the Kremlin.

Anyone with knowledge of the situation there will know that this will not change as the main reason for the conflict (at least from a Russian perspective) is Ukraine joining NATO. These developments are likely to keep some geopolitical risk premium in play and keep safe haven demand going. 

Global Central Banks were one of the main drivers of the Gold price rise in 2024. This is expected to continue in 2025. The World Gold Council survey revealed in the second half of 2024 that Central Banks are likely to purchase more Gold in the next 12 months. This should further bolster demand for the precious metal.

When it comes to risks affecting Gold prices moving forward, it does get challenging. The reason for this is the incoming Trump administration is expected to do good things for the economy but some policies could lead to higher interest rates. This could weigh on Gold prices. 

This is a double-edged sword however, in that the increased risk of uncertainty from Trump policy and concern around the impact of tariffs could actually bolster the demand for safe haven assets and thus Gold. 

All in all analysts are largely pricing in further gains for the precious metal in 2025, personally I do see the potential for upside as well. However, I would not rule out a deeper correction before price does actually breach the current ATH resting around the 2790 handle. 

The Week Ahead

Today could potentially be a slow day with the New Years holiday tomorrow. In such a case we could see a similar repeat to yesterday’s price action with a slow grind to the downside.  

The holiday tomorrow will be followed by a return on Thursday January 2, 2025 which could bring about some volatility to markets as liquidity is expected to start returning to normal. Friday brings the last piece of high impact data from the US with the ISM Manufacturing PMI release.

The data is unlikely to change the overall narrative of the USD and thus any moves inspired by the data is likely to remain short-lived. 

For all market-moving economic releases and events, see the MarketPulse Economic Calendar.

Technical Analysis Gold (XAU/USD)

From a technical analysis standpoint, this analysis is a follow up from the technicals last week. Read: Gold (XAU/USD) Technical Analysis: Bullish Structure Emerges

Gold appeared poised for a move higher last week and it very much obliged. The precious metal ran into the first key area of resistance around the 2639 before falling to close the week around 2620.

The two-hour chart below shows the clear change in structure after topping out at 2639 on December 26. Since then, price has printed a series of lower highs and lower lows, breaching the 2600 psychological level briefly yesterday. 

There is a descending trendline in play on the two-hour chart with a candle break and close above the trendline potentially leading to a retest of 2639.

A break below the $2600 handle may find support at the long-term ascending trendline which rests around the 2592-2596 range. 

Gold (XAU/USD) Two-Hour (H4) Chart, December 31, 2024

Source: TradingView (click to enlarge)

Support

Resistance

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