- At the start of the short trading week due to holidays, gold prices are still on their strong upward trend, gaining at the start of the week to reach the resistance level of $2182 per ounce.
- This is closest point to the psychological resistance level of $2200 per ounce.
- Last week, gold prices moved towards the historical resistance level of $2222 per ounce before being later exposed to profit-taking selling, but this did not take it out of the general upward trend.
According to gold trading platforms, gold prices recorded weekly gains of about 0.3%, adding to their annual increase since the beginning of 2024 by about 5.1%. In the same performance, silver prices, the sister commodity of gold, exceeded the $25 per ounce level again. The white metal price was stable last week but is still up 4% so far this year.
In general, the metals market began to emerge amid renewed hopes of the Federal Reserve cutting US interest rates. Last week, the US Federal Reserve kept the benchmark federal funds rate unchanged, but the Summary of Economic Projections (SEP) indicated that officials still plan to cut US interest rates three times this year. At the same time, the SEP data pointed to higher interest rates for a longer period as the US central bank plans to pull the trigger for fewer rate cuts in 2025 and 2026.
Meanwhile, this supports the continued rise in gold prices because they are sensitive to interest rates as they can affect the opportunity cost of holding the non-yielding bullion.
According to the Economic Calendar, there will be some vital data this week that monetary authorities need to scrutinize, including the US Personal Consumption Expenditures Price Index. The Personal Consumption Expenditures Index, the Fed's preferred inflation gauge, is expected to jump 0.4% on a monthly basis. The core PCE price index, which excludes volatile food and energy components, is also expected to rise 0.3%. On an annual basis, PCE and core PCE are expected to remain unchanged at 2.4% and 2.8%, respectively.
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At the same time, US Treasury yields rose, with the yield on the 10-year note rising 2.5 basis points to 4.243%. The yield on the two-year note rose 3.2 basis points to 4.632%, while the yield on the 30-year note rose two basis points to 4.412%. Another factor affecting the gold market is the rise of the US dollar index (DXY), a measure of the dollar against a basket of other major currencies, to above 104.00. Despite some bumps along the way, the DXY has risen by about 3% since the beginning of the year so far. As is known, the strength of the US dollar is a bad thing for dollar-denominated commodities because it makes them more expensive for foreign investors to buy.
In other commodity markets, copper futures rose to $4.0315 per pound. Also, Platinum futures rose to $913.60 an ounce. Palladium futures rose to $1027.00 an ounce.
Gold Price Forecast and Analysis Today:
There is no change in my technical view of gold price performance as the overall trend remains bullish. Furthermore, it should be noted that moving towards the historical resistance at $2200 will push technical indicators towards strong overbought levels. As mentioned before, global geopolitical tensions will continue to be a fertile environment for further gold gains regardless of the performance of the US dollar. Therefore, if profit-taking sales occur at any time and prices move downward, there will be opportunities to buy gold again. Ultimately, the first break in the overall uptrend for the gold price requires a move towards support levels at $2135 and $2070 respectively.
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