- As expected, spot gold prices have moved towards the psychological resistance level, reaching $2,702 per ounce today, the highest price in a month, and is currently stable around this level.
- Gold prices have gained because of the easing of US core inflation, which has renewed hopes for a less restrictive policy from the US Federal Reserve in 2025.
- According to the economic calendar data, US core inflation slowed unexpectedly, while core US consumer prices did not show any significant upward surprises.
- This has boosted demand for gold bullion, as progress in reducing inflation could push the Federal Open Market Committee (FOMC) to ease monetary policy, reducing the opportunity cost of holding non-yielding assets.
Expectations for the future of US interest
In this regard, financial markets now expect the US Federal Reserve to deliver 40 basis points of US interest rate cuts by the end of 2025, up from the 31 basis points expected before the data. However, some Federal Reserve officials have indicated that the battle against US inflation is not over yet. Concerns about continued price pressures have increased due to the pro-inflation policies proposed by Trump, who will officially take office next week, including tariffs on major trading partners and increased deficit spending.
On another front regarding the gold market, Israel and Hamas have reached a ceasefire and hostage release agreement, reducing gold's appeal as a safe haven.
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Investors Brace for Market Correction
Financial markets face the risk of correction amid inflationary and pricing pressures, according to a leading wealth manager. Nigel Green, CEO of deVere Group, says, “US equities are poised for a challenging year as market vulnerabilities come to the fore; with elevated bond yields and potential disappointments in economic data or earnings posing major threats that could derail the rally.”
DeVere, one of the world's largest independent financial advisory and asset management organizations, adds that investors should adjust their exposure to accommodate short-term volatility while remaining positioned to seize longer-term opportunities. The official, who expects “US interest rates to rise above 5%, a level that is inadequately priced in the market,” added that “complacency among investors regarding inflation and interest rates is a concern.”
Trading Tips:
Dear TradersUp follower, always make gold one of the most important investment items in your trading account. Also, do not forget that its prices rose by 27% last year and are subject to further increases if the factors for its recent profit are available.
According to recent trading, the yield on the US 10-year Treasury notes, a key measure of the cost of financing in the United States, peaked this week at 4.80%, and markets are wary of breaching the 5.0% level before the end of the month. Clearly, this indicates tightening financial conditions for companies and consumers while at the same time increasing the attractiveness of government bonds compared to stocks.
Gold Price Technical Analysis and Expectations Today:
Dear reader, according to daily chart trading and gold analysts' forecasts, the movement of the gold price indicator around and above the $2,700 per ounce resistance strengthens the bulls' control over the current overall uptrend. The Relative Strength Index and Stochastic Oscillator indicators have some space before moving towards oversold levels, which strengthens the bulls' control and readiness to move towards stronger peaks. Technically, the closest of which are currently $2,708 and $2,725 per ounce, respectively.
Conversely, and over the same time period, the closest support levels for gold prices will be $2,688, $2,665, and $2,648 per ounce, respectively. So far, we still prefer the strategy of buying gold from any downward level without taking excessive risks and activating take-profit and stop-loss orders to ensure the safety of the trading account from any sudden price reversals.
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