GOLD Price Analysis – Jan 01, 2025
Daily Price Outlook
Gold (XAU/USD) entered 2025 with bullish momentum after its exceptional performance in 2024. The precious metal gained more than 26% throughout the year, marking its highest annual increase since 2010.
This surge was driven by a combination of factors, including strong demand from central banks, persistent geopolitical instability, and loose global monetary policies. These trends pushed gold to new heights, with the price hitting an all-time record of $2,790.15 on October 31, 2024.
Gold to Remain Supported in 2025 Amid US Dollar Pressure and Geopolitical Risks
Despite a stronger US Dollar and slower Fed rate cuts, gold is expected to remain supported in 2025. The Federal Reserve's cautious stance on rate cuts and uncertainty surrounding economic strategies under the incoming Trump administration are putting pressure on the US Dollar.
However, gold has benefited from rising geopolitical risks, central bank demand, and global monetary easing in 2024. Analysts predict that gold could reach $3,000 per ounce due to continued demand from central banks and the gradual impact of Fed rate cuts.
China's Mixed Economic Data Boosts Gold's Safe-Haven Appeal
On the other hand, China's official Non-Manufacturing PMI showed improvement in December, rising to 52.2 from 50.0 in November, surpassing expectations.
This indicates stronger growth in services and other non-manufacturing sectors, which could be a sign of economic recovery despite the manufacturing slowdown.
However, the official Manufacturing PMI slipped slightly to 50.1, down from 50.3 in November, reflecting weaker performance in the manufacturing sector, although still above the 50.0 mark that separates expansion from contraction.
Meanwhile, home prices in China showed a slight increase in December, with new home prices rising by 0.37% from the previous month. On a year-on-year basis, prices rose by 2.68%, higher than November's growth of 2.40%.
This indicates that the property market is stabilizing, helped by government measures to support homebuying, such as cutting mortgage rates and reducing down payments.
Despite the challenges faced by the property sector, these efforts suggest that China is working to revive the market after a tough period following the debt crisis in 2021.
The mixed economic data from China, including weaker manufacturing and improving services, may increase uncertainty, potentially supporting gold. Gold often benefits from economic slowdowns or instability, as investors seek safe-haven assets during periods of market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,624.26, marking a modest 0.71% gain, as cautious optimism prevails in the precious metals market.
On the 4-hour chart, the pivot point at $2,626.95 is pivotal for defining short-term momentum. Immediate resistance stands at $2,638.91, followed by $2,651.73 and $2,665.31.
On the downside, immediate support lies at $2,593.70, with deeper levels at $2,577.23 and $2,561.89, providing crucial stability if bearish sentiment intensifies.
Gold's technical indicators offer mixed signals. The RSI is at 58, indicating moderate bullish momentum, while the price holds above the 50 EMA at $2,620.66, suggesting near-term strength.
However, the market faces resistance near $2,638.91, making this a critical threshold for further upward movement.
A sustained break above this level could open the path toward higher resistance zones, while failure to breach may reinforce a consolidation or bearish retracement.
Traders should monitor the $2,626.95 pivot point closely, as a decisive move below this level could trigger bearish sentiment, with potential targets at $2,605 and $2,593.70.
Conversely, a break above $2,638.91 would likely attract buyers, setting the stage for further gains.
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