Gold struggles near multi-week low amid USD strength
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Gold prices face continued selling pressure, trading close to their recent lows as the US Dollar’s strength endures. Driven by expectations of pro-growth, inflationary policies under President-elect Trump, the USD remains in favor, limiting gold’s upside despite cautious Fed rate-cut expectations.
Gold Price Pressured by Trump Trade and Elevated US Bond Yields
Gold (XAU/USD) is under selling pressure, as the Trump-driven USD rally continues to undermine demand for the precious metal. The XAU/USD pair is trading close to its multi-week low, with the strong Greenback outlook and inflationary pressures overshadowing recent Fed rate cuts. The optimism around Trump’s proposed 10% tariff on US imports is expected to stoke inflationary concerns, which would restrict the Federal Reserve’s ability to adopt an aggressive easing cycle. This outlook supports elevated US Treasury bond yields, adding to the challenges for non-yielding gold.
At the time of writing, XAU/USD is positioned below the $2,700 level, testing near-term technical supports.
Awaiting Economic Data and Fed Speakers for Guidance
Investors are now focused on this week’s US economic releases, including the Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday. These releases are likely to provide more precise cues about inflation trends, which will weigh on Fed policy expectations. Further, speeches by Federal Reserve officials, particularly Chair Jerome Powell’s, are anticipated to shape the rate-cut path, potentially affecting gold’s trajectory. Market participants currently price in a 65% chance of another 25-basis point Fed rate cut by December.
Technical Outlook: Gold Price Holds Key Supports Amid Downward Pressure
From a technical perspective, gold remains vulnerable while trading below its critical $2,700 resistance zone. The first level of significant support is positioned near $2,660, with the next major support zone marked by the 50-day Simple Moving Average (SMA) around $2,647. Should the XAU/USD break below last week’s swing low of $2,643, this could act as a bearish trigger, accelerating the fall towards October’s low at $2,605.
Conversely, a move back above $2,700 would encounter initial resistance near $2,718, which aligns with the 50% Fibonacci retracement level. A sustained rally above this level could target the $2,740-$2,745 supply zone, with further upside capped at $2,750. Breaching this could set the stage for a move towards the $2,758-$2,790 range, near the all-time high.
In summary, the XAU/USD remains under technical and fundamental pressure, with upside limited by a firm USD and market expectations of restrained Fed rate cuts. However, key data and Fed commentary this week will be critical in determining the next directional move for gold.
Gold Price Pressured by Trump Trade and Elevated US Bond Yields
Gold (XAU/USD) is under selling pressure, as the Trump-driven USD rally continues to undermine demand for the precious metal. The XAU/USD pair is trading close to its multi-week low, with the strong Greenback outlook and inflationary pressures overshadowing recent Fed rate cuts. The optimism around Trump’s proposed 10% tariff on US imports is expected to stoke inflationary concerns, which would restrict the Federal Reserve’s ability to adopt an aggressive easing cycle. This outlook supports elevated US Treasury bond yields, adding to the challenges for non-yielding gold.
At the time of writing, XAU/USD is positioned below the $2,700 level, testing near-term technical supports.
Awaiting Economic Data and Fed Speakers for Guidance
Investors are now focused on this week’s US economic releases, including the Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday. These releases are likely to provide more precise cues about inflation trends, which will weigh on Fed policy expectations. Further, speeches by Federal Reserve officials, particularly Chair Jerome Powell’s, are anticipated to shape the rate-cut path, potentially affecting gold’s trajectory. Market participants currently price in a 65% chance of another 25-basis point Fed rate cut by December.
Technical Outlook: Gold Price Holds Key Supports Amid Downward Pressure
From a technical perspective, gold remains vulnerable while trading below its critical $2,700 resistance zone. The first level of significant support is positioned near $2,660, with the next major support zone marked by the 50-day Simple Moving Average (SMA) around $2,647. Should the XAU/USD break below last week’s swing low of $2,643, this could act as a bearish trigger, accelerating the fall towards October’s low at $2,605.
Conversely, a move back above $2,700 would encounter initial resistance near $2,718, which aligns with the 50% Fibonacci retracement level. A sustained rally above this level could target the $2,740-$2,745 supply zone, with further upside capped at $2,750. Breaching this could set the stage for a move towards the $2,758-$2,790 range, near the all-time high.
In summary, the XAU/USD remains under technical and fundamental pressure, with upside limited by a firm USD and market expectations of restrained Fed rate cuts. However, key data and Fed commentary this week will be critical in determining the next directional move for gold.