- Despite the gains of the US dollar and hovering near its highest in more than two years, the demand for buying gold bullion as a safe haven is still increasing, which ensures that prices remain high.
- Yesterday, gold prices jumped to the resistance level of $ 2694 per ounce.
- We had previously recommended selling gold near that peak, and the price retreated to a support level of $2657 per ounce due to profit-taking before stabilizing around $2668 at the time of writing this analysis.
- Investors and financial markets are cautiously awaiting the release of US inflation data, which will have a direct and significant impact on the future of US monetary policy.
Why did gold prices decline recently?
According to gold trading companies' platforms, gold prices declined in conjunction with the rise in global bond yields and the continued strength of the US dollar, as investors react to expectations regarding the future of reducing US interest rates. According to the trading, the yields on US 10-year Treasury bonds - the rate that supports the global cost of capital - reached their highest level in 14 months. At the same time, the US dollar index rose, and as is known, these are factors that weaken investors' appetite for buying gold bullion.
Will the price of gold rise in the coming days?
This will depend on the reaction of investors and financial markets to the announcement of US inflation figures, along with a group of important US economic releases that will directly affect the path of the US Federal Reserve's policies, as well as the performance of the US dollar, which ultimately affects the performance of gold prices in the coming days.
Recently, the stronger-than-expected US jobs report contributed to reducing experts' expectations for further cuts in US interest rates. This week, anticipation will be for the announcement of the US consumer price index readings, the producer price index, and then the US retail sales figures. Then, attention will be paid to the reaction to Trump's inauguration as President of the United States in a few days. In general, financial markets currently expect the US interest rate to be cut by 25 basis points this year, compared to expectations of a 40-basis point cut last week, according to Reuters. As a result, the yield on the US 10-year Treasury bond approached 4.8% at the beginning of the second week of 2025, its highest level since October 2023, after rising by 17 basis points last week. Similarly, the yield on the 30-year Treasury bond exceeded 5% for the first time in more than a year.
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Trading Tips:
Gold is one of the most important investments, so always make sure that it is one of the components of your investment portfolio
Gold Price Technical Analysis and Expectations Today:
According to gold analysts' forecasts, the overall trend for gold prices remains bullish. A move towards the psychological resistance level of $2700 per ounce will confirm the strength of the bulls' control over the price direction and may signal further buying of gold. Especially, if the US dollar's gains pause and geopolitical tensions increase. The Relative Strength Index and the MACD are trending upwards, indicating a positive momentum. We still recommend buying gold at every dip. The closest support levels for gold prices are currently $2645, $2628, and $2600 per ounce.
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