Gold holds steady amid modest USD gains, rate decisions loom large
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Gold prices softened slightly on Thursday, retreating from the three-month peak reached earlier this week. A modest recovery in the US Dollar and steadier equity markets have put some pressure on the safe-haven metal, though downside momentum remains limited due to supportive fundamentals.
USD uptick meets Fed rate cut speculation
Gold prices eased to $2,745 during early European trading, as the US Dollar extended its recovery for a second consecutive day. The rebound in US Treasury bond yields added further support to the Greenback, while markets appeared cautious ahead of key economic data and geopolitical developments.
However, expectations for further Federal Reserve rate cuts this year continue to weigh on bond yields and temper the USD's strength. Markets are pricing in at least two rate reductions in 2025, a factor that bolsters the non-yielding yellow metal.
Tariff concerns and global central bank decisions
US President Donald Trump’s tariff policies remain a wild card for market participants. While initial comments have spurred inflationary concerns, the lack of specifics has kept risk sentiment buoyant, limiting gold’s immediate appeal.
Traders are also closely watching Trump's upcoming address at the World Economic Forum for clues on trade policy. Additionally, the Bank of Japan’s expected rate hike on Friday and next week’s Federal Reserve and European Central Bank meetings could significantly influence the trajectory of gold prices.
Technical analysis: gold’s critical levels
Gold bulls retain control as long as prices stay above the $2,720-$2,725 support zone. This area represents a key resistance-turned-support level and is further reinforced by the 100-day EMA and a short-term ascending trend line.
A break below $2,720 could push prices toward $2,700, with deeper corrections targeting $2,665 and the $2,625 pivot zone.
On the upside, immediate resistance lies at $2,763, with a sustained breakout potentially propelling gold toward its all-time high of $2,790. A move beyond $2,800 could solidify the bullish trend and set the stage for further gains in the coming weeks.
Outlook
Gold prices remain influenced by a mix of USD dynamics, Fed rate expectations, and geopolitical uncertainty. While near-term downside risks exist, the broader bullish trend remains intact as investors look for safe-haven opportunities amid volatile market conditions. With significant central bank meetings on the horizon, gold traders should prepare for heightened volatility and potential directional moves.
USD uptick meets Fed rate cut speculation
Gold prices eased to $2,745 during early European trading, as the US Dollar extended its recovery for a second consecutive day. The rebound in US Treasury bond yields added further support to the Greenback, while markets appeared cautious ahead of key economic data and geopolitical developments.
However, expectations for further Federal Reserve rate cuts this year continue to weigh on bond yields and temper the USD's strength. Markets are pricing in at least two rate reductions in 2025, a factor that bolsters the non-yielding yellow metal.
Tariff concerns and global central bank decisions
US President Donald Trump’s tariff policies remain a wild card for market participants. While initial comments have spurred inflationary concerns, the lack of specifics has kept risk sentiment buoyant, limiting gold’s immediate appeal.
Traders are also closely watching Trump's upcoming address at the World Economic Forum for clues on trade policy. Additionally, the Bank of Japan’s expected rate hike on Friday and next week’s Federal Reserve and European Central Bank meetings could significantly influence the trajectory of gold prices.
Technical analysis: gold’s critical levels
Gold bulls retain control as long as prices stay above the $2,720-$2,725 support zone. This area represents a key resistance-turned-support level and is further reinforced by the 100-day EMA and a short-term ascending trend line.
A break below $2,720 could push prices toward $2,700, with deeper corrections targeting $2,665 and the $2,625 pivot zone.
On the upside, immediate resistance lies at $2,763, with a sustained breakout potentially propelling gold toward its all-time high of $2,790. A move beyond $2,800 could solidify the bullish trend and set the stage for further gains in the coming weeks.
Outlook
Gold prices remain influenced by a mix of USD dynamics, Fed rate expectations, and geopolitical uncertainty. While near-term downside risks exist, the broader bullish trend remains intact as investors look for safe-haven opportunities amid volatile market conditions. With significant central bank meetings on the horizon, gold traders should prepare for heightened volatility and potential directional moves.