GOLD Price Analysis – Dec 30, 2024
Daily Price Outlook
Gold (XAU/USD) has been trading within a narrow range, showing mixed signals around the 2,619 level, with an intraday high reaching 2,628.
This sluggish movement can be attributed to several factors, including expectations of fewer Fed rate cuts in 2025 and the ongoing geopolitical risks, such as the prolonged Russia-Ukraine conflict and rising tensions in the Middle East.
Despite this, gold continues to find upward support as markets await further clarity on the U.S. economy under the potential Trump administration and the Federal Reserve's stance on interest rates for the coming year.
Investors are closely watching for any signals that might provide direction in the coming months.
Gold's Performance Amid US Dollar Weakness and Geopolitical Tensions
On the US front, the broad-based US dollar has been slightly weaker, trading around 108.00 on the US Dollar Index (DXY), just below its highest level since November 2022.
Traders are still digesting the US Federal Reserve's (Fed) recent moves, including a quarter-point rate cut in December.
The latest Fed projections suggest two more rate cuts next year, but this cautious outlook for rate cuts could limit gold's potential upside.
As a non-yielding asset, gold often benefits when interest rates are lower or when Treasury yields decline.
Gold is also receiving support from geopolitical tensions, such as the ongoing Russia-Ukraine conflict and escalating issues in the Middle East. Recently, Israeli forces attacked hospitals in Gaza, resulting in casualties and heightened concerns.
These risks, along with potential trade conflicts under the incoming Trump administration, could increase the demand for safe-haven assets like gold, as investors seek protection against global uncertainties.
Looking at gold’s performance, the yellow metal is set to finish the year with a remarkable 27% gain, marking its strongest annual performance since 2010.
This surge has been driven by central bank buying, rising geopolitical risks, and loose monetary policies from major central banks.
Therefore, the combination of a subdued US dollar and falling Treasury yields is adding to gold’s strength.
While gold continues to find upward support, the outlook for the US economy and Fed's policy changes in 2025 remains key factors to watch for further price movements.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,619.77, down 0.09% in the last session, as bearish momentum dominates short-term price action.
The pivot point at $2,627.06 remains a key level to monitor. Prices staying below this threshold signal a continuation of the bearish bias, with immediate support at $2,607.94. Further declines could test secondary support levels at $2,593.70 and $2,577.23.
Resistance levels on the upside are clustered at $2,638.91, $2,651.73, and $2,665.31, presenting significant barriers to bullish recovery.
The Relative Strength Index (RSI) at 44 reflects moderately bearish momentum, with no immediate signs of oversold conditions. The 50 EMA, positioned at $2,622.68, reinforces the bearish trend, as gold continues to trade below this level.
A symmetrical triangle pattern on the 4-hour chart indicates potential for a breakout. However, the formation of a bearish engulfing candle suggests downward pressure remains dominant.
A short-term sell strategy below $2,627 with a target of $2,608 and a stop loss at $2,643 aligns with the current technical landscape.
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