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Gold Price Floats Close to Weekly Lows Despite Increasing US Bond Yields and Trade Risk

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  • February 27, 2025
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Gold prices are under strain, trading close to a weekly low of less than $2,900 as increasing US Treasury bond yields strengthen the US Dollar. A minor USD rebound combined with a good equity market mood has dented demand for the safe-haven metal. Nonetheless, volatility regarding US President Donald Trump’s tariff strategy and persisting concerns about the ongoing trade war lends some support to XAU/USD. While in the meantime hopes for further Federal Reserve interest rate cuts based on indications that the US economy is slowing offer a cap to gold losses, market participants look to future US economic releases such as Q4 GDP, Durable Goods Orders, and the Fed’s favored measure of inflation, the PCE Price Index, for more market guidance. KEY LOOKOUTS • Higher US Treasury bond yields are favoring the US Dollar, putting downward pressure on gold prices and capping upside moves. • Doubts surrounding President Trump’s plans on tariffs, especially on imports from the EU, Mexico, and Canada, can affect safe-haven demand for gold. • Market expectations of more Fed rate cuts due to weakening US economic growth can act as a floor to gold, capping its downside. • Major releases such as Q4 GDP, Durable Goods Orders, and the PCE Price Index will provide new information about economic conditions and gold price action. Gold prices are still volatile as investors closely watch major economic and geopolitical events. The increasing US Treasury bond yields have supported the US Dollar, putting downward pressure on the precious metal. In the meantime, uncertainty regarding President Trump’s tariffs strategies, particularly possible levies on European goods, persists and continues to move markets. Regardless of these bearish elements, hopes for additional Federal Reserve rate cuts as evidenced by slowing US growth could offer some purchasing pressure support for gold. Further, near-term US economic data releases such as Q4 GDP, Durable Goods Orders, and the PCE Price Index will be instrumental in deciding the future direction for XAU/USD. Gold prices remain under pressure as rising US bond yields strengthen the US Dollar, weighing on the metal. Uncertainty over Trump’s tariff plans and expectations of Fed rate cuts may influence price movements. Key US economic data, including Q4 GDP and the PCE Price Index, will provide further direction. • XAU/USD trades below $2,900, pressured by rising US bond yields and a stronger US Dollar. • A US Treasury yield rally strengthens the USD, putting downward pressure on gold prices. • New tariffs on EU imports and Mexican and Canadian tariff delays instill market uncertainty, affecting gold demand. • Market speculation of additional Fed rate cuts in a slowing US economy can be bullish for gold. • Q4 GDP, Durable Goods Orders, and the PCE Price Index will be key drivers of short-term gold price action. • The key support is at $2,888, and a break below $2,860 could initiate further weakness down to $2,800. • A breakout above $2,920 may see selling pressure around $2,930, but persistent strength can drive gold up to $2,950-$2,955 resistance. Gold prices continue to be shaped by general economic and geopolitical conditions as investors weigh the effects of increasing US bond yields and trade tensions. The rising US Dollar, bolstered by a recovery in Treasury yields, continues to pressure the precious metal. But worries over President Trump’s tariff policies, including possible tariffs on European imports and ongoing trade tensions with Mexico and Canada, foster an environment of uncertainty. These geopolitical trends tend to propel safe-haven demand, making gold still a part of investors’ investment portfolios. Further Federal Reserve interest rate reductions, fueled by the indications of an economic growth slowdown, may also influence gold’s long-term attractiveness. GOLD Daily Price Chart Chart Source: TradingView Market participants are now keenly observing the significant US economic data releases that may further indicate the economic outlook. Data releases like Q4 GDP, Durable Goods Orders, and the PCE Price Index will assist in assessing the US economy’s strength and impact investor mood. Further guidance on the central bank’s future monetary policy may also be provided by speeches from Federal Reserve officials. Against these events, gold continues to be an asset of interest, with investors weighing its safe-haven attraction against changing macroeconomic fundamentals. TECHNICAL ANALYSIS Gold prices are immediately supported at the $2,888 level, with further downside risk to the $2,860-$2,855 area if bearish momentum continues. A break below this area would increase selling pressure, driving prices towards the $2,834 level and potentially the psychological $2,800 level. To the upside, resistance is found near the $2,920 level, with further selling pressure anticipated around the $2,930 area. A continued breakout above this barrier may set the stage for additional gains towards the $2,950-$2,955 resistance zone, which is the record high achieved earlier this week. The next direction will be closely monitored by traders through price action at these significant levels. FORECAST Gold prices might experience increased downward pressure in the near term on account of a rising US Dollar and an increase in Treasury bond yields. As the USD recovers from multi-month lows, investor psychology can be inclined towards riskier assets, decreasing demand for the safe-haven metal. Further, a bullish sentiment in equity markets and confusion over US tariff policies can be adding to short-term selling pressure. If bearish momentum grows, gold may test lower supports at $2,860, with further downside potential towards $2,834 or even $2,800. On the plus side, gold still has recovery potential if macroeconomic conditions become favorable to it. Rising hopes of cuts in Federal Reserve rates, underpinned by evidence of declining US economic growth, may raise gold demand since lower interest rates lower the opportunity cost of carrying non-yielding assets. Apart from that, geopolitical tensions in the form of trade uncertainties with regards to President Trump’s policy of tariffs might underpin safe-haven purchasing. If gold is able to overcome the $2,920 resistance level, it could gain more momentum towards the $2,950-$2,955 zone, with the possibility of testing new highs if positive sentiment continues to build.

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Commodities Gold

Gold Price Rises on Fresh USD Selling: Market Analysis

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  • January 20, 2025
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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

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Commodities Gold

Gold Bulls Face Key Test at $2,708 Resistance as Inflation Data Boosts Rate Cut Speculation

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  • January 16, 2025
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Gold prices extended their recovery, rising above $2,700 and eyeing further gains, fueled by mixed US CPI data that increased expectations for a Federal Reserve rate cut by June. While headline CPI accelerated, core inflation rose more slowly than expected, boosting the probability of a 25 basis point rate reduction, with the CME FedWatch tool showing a 63.8% chance of lower rates after the June meeting. This drove gold’s ascent to a pivotal level of $2,708, with potential resistance at $2,721 and the all-time high of $2,790 looming ahead. The US 10-year Treasury yield remained in a downward trend, bolstering the positive sentiment for gold. But at $2,708, it is a test of technical significance that may result in a correction if the Relative Strength Index shows it is overheating. A close above $2,721 will put gold into a position for a run to its all-time high. Downside support rests at $2,671, $2,648, and $2,640. KEY LOOKOUTS • Even higher market expectations for a Fed rate cut by June may continue to drive gold prices higher as long as inflation moves lower. • Gold needs to clear some tough resistance at $2,708 and $2,721 to potentially drive prices toward the all-time high of $2,790 • Fast RSI moves could be an overheat sign, and gold prices might experience a short-term correction if momentum declines near major resistance zones. • The US Treasury yields have been trending lower, currently below 4.70%, and are likely to further propel gold upward since lower yields decrease the opportunity costs of holding bullion. The gold is near critical resistances at $2,708 and $2,721. If it breaks out above those levels, then it could continue pushing prices up toward the all-time high of $2,790. Additionally, growing market expectations for a Fed rate cut by June will continue to support the prices if inflation remains subdued. However, the sharp rise in the RSI indicates overheating and a short-term correction if momentum stalls. Moreover, the continued decline in US Treasury yields, which are currently below 4.70%, will further provide upside for gold as lower yields reduce opportunity costs for holding bullion. A rise in the hopes of a Fed rate cut by June supports the gold prices and resistance at $2,708 and $2,721. A breakout might target $2,790; however, overbought RSI and declining Treasury yields bring caution. • Growing market expectation for a 25 basis point rate cut by June supports gold’s upside. • US CPI: Core inflation grows at a slower rate, increasing the chances of Fed rate cut. • Critical resistance sits at $2,708 and $2,721; prices exceeding these levels is a possible threat for pushing up to its highs at $2,790 • An explosive rising RSI often spells overheating conditions that a near-term selling could be inevitable should the move get stuck up • Treasury yields falling well under 4.70% decrease opportunity costs, aiding the rise in gold; bearish thesis from this arena ruled out by technical • Buy-support levels arrive around $2,671,$ 2,648, $2,640. • The upcoming US economic data, such as retail sales and jobless claims, will be critical in determining the market sentiment and direction of gold prices. Gold prices are on the upswing due to increasing prospects of a rate cut by the Federal Reserve by June, following mixed US CPI data. Although the headline inflation has accelerated, core inflation increased at a slower pace, which has increased the chances of a 25 basis point rate cut. The market is now pricing in a 63.8% chance of lower rates after the June meeting, which has fueled demand for gold as a safe haven. Gold is facing key resistance at $2,708 and $2,721; breaking these levels could see it targeting the all-time high of $2,790. XAU/USD Daily Price Chart Sources: TradingView, prepared by ELLYANA Technical indicators are hinting at being cautious, but the Relative Strength Index (RSI) reflects rapid growth here, which would mean overheating and a good chance of seeing a short-term correction. On the downside, one finds support lines at $2,671, $2,648, and $2,640. Yet, falling US Treasury yields, at this point less than 4.70%, continue to give gold prices their boost since falling yields lower the opportunity cost for holding non-yielding assets, such as bullion. Upcoming US economic data in the form of retail sales and jobless claims, for example, could decide the course of gold to maintain its bullish or pull back. TECHNICAL ANALYSIS The firm currently remains in an uptrend with prices above $2,700 and is seen making its way toward significant resistance at $2,708. A crack of this level will push gold to $2,721 and all-time high of $2,790. However, the Relative Strength Index is increasing rapidly, showing more and more bullish momentum, but also at a risk of overheating and short-term correction. Key support levels are at $2,671 (trendline), $2,648 (55-day SMA), and $2,640 (100-day SMA). If gold fails to break through resistance, a pullback towards these support zones could occur, while strong breaks could extend the rally further.  FORECAST Gold is now bullish, with an excellent thrust above $2,700. If the price breaks above $2,708, then it should move into $2,721, which could hit $2,790 as the all-time high. Continued expectations for a June Fed rate cut and falling Treasury yields will push gold even higher. When gold clears $2,721, then it can open the route to a rally into $2,790 or higher. If gold runs into resistance and cannot break above $2,708, there is a good chance of a pullback, especially if the RSI is showing signs of overheating. In this case, key support levels are at $2,671 (trendline), $2,648 (55-day SMA), and $2,640 (100-day SMA). A failure to hold above these levels could send the price lower, potentially testing $2,640 or lower. The risk of a correction is higher if momentum slows or if unfavorable economic data impacts sentiment.

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Commodities Gold

Gold Faces Pressure as Risk Appetite Grows; CPI Data in Focus for Market Direction

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  • January 15, 2025
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Gold prices are currently under pressure as a “risk-on” market sentiment reduces demand for safe-haven assets like gold. Expectations for a slower pace of Federal Reserve rate cuts have driven flows away from the precious metal, while softer-than-expected US Producer Price Index (PPI) data adds further uncertainty. Traders are on the sidelines ahead of the US Consumer Price Index report, which could dramatically alter the market’s perception of Fed policy going forward. A better-than-expected CPI might put a damper on gold’s rally, while weaker-than-expected data might add more fuel to the fire in terms of gold prices. From a technical perspective, gold is still in a consolidation pattern, with major resistance levels at $2,675 and $2,700, and significant support at $2,640 and $2,615. The near-term direction of gold may be dictated by the outcome of the CPI report. KEY LOOKOUTS • The CPI report will drive Fed rate cut expectations and the direction of gold. • A breakout above $2,675 may lead to further upside toward $2,726. • Support zones at $2,640 and $2,615 may prevent a deeper downside. • A risk-on sentiment may cap demand for gold and limit upside momentum. Gold prices closely correlate with market events that will be taking place soon, the US CPI report being one of the most crucial factors in expectations of future Fed rate cuts. If the data for the CPI comes in better than expected, it may affect the bullish sentiment in gold; on the contrary, weaker data may support additional price gains. Key technical levels are also focused on, and resistance is near $2,675 and $2,700, while support lies around $2,640 and $2,615. Moreover, the general market’s risk appetite will play a role in the next direction, as the risk-on environment might suppress demand for gold and cap its rally. The factors above need to be closely monitored by traders in the near future. The next US CPI report will be decisive for the outlook of gold’s price, where resistance will be found at $2,675 and support at $2,640. Market sentiment and expectations for Fed rate cuts will also guide gold’s direction. KEY POINTS Gold has been under pressure due to changing market sentiment from risk-off to risk-on. As a result, the safe haven demand of the yellow metal is being dampened. Market participants are waiting for the US Consumer Price Index (CPI) that could have a big impact on the expectations for further Federal Reserve rate cuts. If CPI is stronger than expected, this may make the Fed sound a bit hawkish, which will send gold down. If it is weaker than expected, this will be helpful for gold in its bullishness. Technically, gold faces strong resistance around $2,675 and $2,700. If the price breaks through these barriers, it is most likely to target the December high of $2,726. On the flip side, significant support zones are present around $2,640 and $2,615. In case gold comes under downward pressure, these levels may serve as a floor. Deeper technical factors aside, more significant factors are at play here as well. Market expectations have been adjusted to only one Fed rate cut in 2025, which in turn is limiting the appeal of gold as an alternative asset. A prevailing risk-on sentiment where investors are preferring riskier assets could limit gold’s upside. Geopolitical risks and economic uncertainties may however provide some support for gold as a safe-haven investment. The Relative Strength Index (RSI) is still above the midline, hence remaining in a bullish consolidation phase. Furthermore, gold continues being a “buy-the-dips” trade. TECHNICAL ANALYSIS Gold is consolidating in a bullish phase after the breakout from the symmetrical triangle pattern, and the RSI of 14 days continues to print above the midline around 56. The market exhibits the sentiment of “buy the dips.” It still has key resistance at $2,675 and $2,700. Any sustained break above these could signal further upside toward the December 12 high of $2,726. On the negative side, strong support is found at $2,640, a critical zone marked by multiple moving averages and the triangle convergence. A drop below this level could lead to further declines, with $2,615 acting as the next key support area. The technical indicators suggest that gold could continue to consolidate or push higher, depending on how these key levels hold. XAUUSD Daily Price CHART Sources: TradingView, Prepared by ELLYANA FORECAST Short-term gold price forecasts are highly dependent on key technical levels and some upcoming economic data, most importantly the US CPI report. If gold can break and hold above the $2,675-$2,700 resistance zone, we may expect further upside momentum towards the December high of $2,726. A sustained break above $2,700 could open the door for a bullish run and potentially target higher levels. However, if gold breaks down, not above the resistance barrier, but is subjected to selling pressures, it will be tested to the strong support zones around $2,640 and $2,615. Below that, at $2,640, a deeper correction seems highly likely, with $2,615 being the next serious level of support. Overall market sentiment, from the risk-on mood to the Federal Reserve’s stance, will also play a large role in setting the direction for gold. If inflation data is weaker than expected, this could help push gold higher. Stronger data might send it lower.

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