Gold prices have started the week on a positive note, supported by renewed selling pressure on the US Dollar amid growing expectations of two Federal Reserve interest rate cuts this year. The yellow metal, considered a hedge against inflation and economic uncertainty, finds support around the $2,700 mark, with technical levels indicating potential resistance near $2,715 and $2,724-2,725. On the downside, any dips are likely to attract buyers, with significant support zones at $2,662 and $2,635. Although a strengthening geopolitical sentiment and strong equity market mood might put a lid on gains, the markets are on their toes before important events such as US President-elect Donald Trump’s inaugural speech that might shape inflation expectations and direction of Federal Reserve policy.

KEY LOOKOUTS

• Markets are expecting two rate cuts from the Federal Reserve this year that may soften the USD and cause gold prices to soar further as an asset that finds safe haven.

• Gold is resisting at $2,715 and $2,725; it could rally to $2,745 if oscillators on the daily chart continue to stay bullish.

• Strong support is seen between $2,662 and $2,635; any significant decline below these levels may attract a bearish trend, thus cautious investor attention.

• Donald Trump’s economic policies and easing tensions in the Middle East are still important factors, which may impact both inflation expectations and safe-haven demand for gold.

Prices for gold still seem buoyant, lifted by expectations that there would be two Federal Reserve rate cuts this year, which has weakened the US Dollar and bolstered safe-haven demand. From a technical perspective, the yellow metal faces resistances near $2,715 and $2,725, and it may climb towards $2,745 if bullish momentum continues. Key support levels are likely to attract dip-buyers at $2,662 and $2,635, capping a deeper decline. While geopolitical tensions ease and US President-elect Donald Trump’s proposed policies are likely to have a bearing on inflation and the Federal Reserve’s response, they remain essential in forming the gold market view.

A softer US Dollar supports gold prices, with Federal Reserve rate cuts being anticipated. Strong support comes in at $2,662, and $2,715 remains the resistance point.

• Speculation about Federal Reserve rate cuts has softened the USD, increasing the appeal of gold as a safe-haven asset.

• Gold faces significant resistance at $2,715 and $2,724-2,725, with potential to reach $2,745 if bullish momentum continues.

• Dip-buying activity is expected near $2,662 and $2,635, offering a safety net for gold’s price movement.

• Daily chart oscillators are seen positive, which might pave the way for potential moves higher, either toward $2,760 or even higher.

• Expectation of policies of Donald Trump and creeping inflationary pressures could definitely exert an influence on investors’ outlook in increasing demand for gold.

• Easing tensions in the Middle East and a stable equity market are likely to cap the short term gains in gold.

• Aiming to challenge its all-time high of $2,790, gold remains a focal point for investors seeking stability amid uncertain global events.

Gold prices started the week on a modest note, supported by renewed selling in the US Dollar amid growing expectations of Federal Reserve rate cuts this year. The prospect of lower interest rates has weakened the greenback, making gold a more attractive safe-haven asset for investors. Technically, gold faces resistance near the $2,715 and $2,724 levels, while support zones at $2,662 and $2,635 continue to attract dip-buying activity. Positive momentum in daily chart oscillators suggests the potential for further gains, with the yellow metal eyeing the $2,745 intermediate hurdle and potentially moving towards its all-time high of $2,790.

XAU/USD Daily Price Chart.

Source: TradingView, Prepared By ELLYANA

However, geopolitical and economic factors could influence gold’s trajectory. The easing of tensions in the Middle East and a generally positive tone in equity markets may cap gold’s upside, as investors show less interest in risk-averse assets. Meanwhile, anticipation of US President-elect Donald Trump’s policies and their potential impact on inflation and monetary policy add another layer of uncertainty to the market. These dynamics, allied with key technical levels, place gold’s performance high on the agendas of traders and investors in the coming weeks.

TECHNICAL ANALYSIS

From a technical analysis viewpoint, gold prices are approaching levels that could go a long way in deciding the near-term trend. The two zones of resistance at $2,715 and $2,724-$2,725 remain crucial. Should these break out, it’s likely to clear the way toward $2,745 and further toward the range of $2,760-$2,762. The daily chart oscillators are still accumulating positive momentum, sustaining the bullish sentiment. On the downside, there is immediate support between $2,700 and $2,690, but a stronger floor around $2,662-$2,635 aligns with a short-term ascending trendline and the 100-day EMA. If these levels fail to hold for an extended period, it would suggest a deeper pullback toward the $2,620-$2,615 confluence zone.

 FORECAST

Gold prices are poised for further gains as technical indicators maintain a bullish outlook. A sustained break above the $2,715 resistance level could open the door to test the $2,724-$2,725 region, a one-month high. Beyond this, the next upside targets lie at $2,745, with an eventual move toward the $2,760-$2,762 area if positive momentum persists. Strong demand from dip-buyers and even more favorable macroeconomic conditions, for example, if the Federal Reserve is expected to cut rates again, could power the rally higher. In the longer term, gold may well try to make a new high at $2,790 in case geopolitical tensions or inflationary concerns flare again.

On the downside, major support lies around $2,700 and then $2,690, and a deeper cushion around $2,662-$2,635. A breakdown of these levels would likely lead to additional selling that would drive the price down toward $2,620-$2,615. Here, several technical factors including a short-term ascending trendline and the 100-day EMA offer good support. More significant corrections for gold could occur in the event of a shift in broader market sentiment or a strengthening US Dollar due to unexpected economic data or Federal Reserve commentary. However, heavy buying interest at lower levels will save the market from a drastic decline and sustain the long-term upward trend.