GOLD Price Analysis – Dec 26, 2024
Daily Price Outlook
Gold prices saw a slight increase in European trading session on Thursday, supported by a weaker US dollar. This came as markets resumed trading after the Christmas holiday.
Investors remained cautious, especially following the US Federal Reserve's recent hawkish stance on interest rates, which has caused some uncertainty in the market. Meanwhile, the market experienced lower trading volumes due to the holiday-shortened week, with fewer traders making significant moves.
US Dollar Strength and Its Impact on Gold Prices
On the US front, the broad-based US dollar was slightly weaker in early trading, yet it remained close to a two-year high. The dollar's strength had been bolstered by the Federal Reserve’s recent decision to maintain high interest rates.
When the Fed raises rates, it makes the US dollar more attractive to investors, as they can earn higher returns on dollar-based assets. This puts pressure on gold prices, as a stronger dollar makes gold more expensive for buyers using other currencies.
Geopolitical Tensions Support Gold as a Safe Haven
Gold is often viewed as a safe-haven asset, especially during times of uncertainty. Geopolitical tensions in the Middle East, including ongoing conflicts between Hamas and Israel, have also played a role in boosting gold prices.
Notably, the two sides accused each other of blocking a potential ceasefire deal, which added to global instability. As a result, investors often turn to gold as a protective asset, driving up its demand and pushing prices higher.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,626.63, up 0.37% in the last session, reflecting bullish momentum. The price has surpassed the pivot point at $2,620.48, signaling potential strength as it approaches the immediate resistance at $2,633.23.
A successful breakout above this level could propel the price toward the next resistance zones at $2,650.09 and $2,664.89. However, if the price fails to hold above $2,620.48, immediate support is observed at $2,608.45, followed by $2,588.62 and $2,573.39.
Technical indicators support a bullish outlook. The RSI is at 58, indicating moderate upward momentum without reaching overbought levels.
Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,614.11 acts as a strong support level, aligning with the current price action. This setup suggests continued bullish bias if gold maintains levels above $2,620.
Traders should monitor the price behavior near $2,633.23. A break above could trigger additional buying interest, targeting $2,650.09, while failure to sustain above $2,620 might lead to a consolidation phase or slight pullback.
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