Today’s analysis offers a comprehensive overview of the gold markets, highlighting the fundamental and technical factors shaping current trends. Our report is designed to empower investors with the insights necessary to navigate these markets successfully.
Gold prices began the week on a softer note, retreating from a one-month high set on Friday. Factors such as hawkish expectations from the Federal Reserve, rising U.S. bond yields, and a strong U.S. dollar are weighing on the precious metal. However, the prevailing risk-off sentiment may provide support for the safe-haven XAU/USD pair, helping to limit further losses.
Markets remain cautious about potential trade policies from U.S. President-elect Donald Trump and their implications for inflation and the economy, enhancing gold’s appeal as a safe haven. Additionally, the recent surge in WTI oil prices raises inflationary concerns in the Trump 2.0 era, further supporting gold as an inflation hedge. Oil prices soared on Friday following the U.S. Treasury’s broader sanctions on Russian oil supplies, which are expected to impact crude exports to major buyers like China and India.
The Labor Department’s NFP report indicated that the U.S. economy added 256,000 jobs in December, surpassing November’s 227,000 and the anticipated 160,000. The unemployment rate unexpectedly dropped to 4.1%, compared to a steady forecast of 4.2%.
The daily chart reveals that, despite some profit-taking, gold buyers remained strong on Friday, extending the breakout from a symmetrical triangle pattern. Gold confirmed an upside break from this month-long formation on January 8, reinforcing the ongoing bullish momentum. The 10, 50, and 100-day Exponential Moving Averages are aligned, and the 14-day Relative Strength Index is comfortably above the midline, suggesting further upward potential for gold prices. Currently, the Stochastic Oscillator is at 89, while the Relative Strength Index is at 60.
The gold market is at a crucial juncture, with key support and resistance levels indicating potential future movements:
In the intricate and constantly changing bullion markets, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. Our report aims to offer a balanced perspective to help investors navigate the complexities of gold trading effectively.