Article by: ETO Markets
Gold's price action reflects an intensifying interplay between deteriorating real yield dynamics and mounting political risk premium. December's ISM Manufacturing PMI improvement to ..., coupled with resilient labour market metrics, has reinforced the Fed's hawkish policy stance, driving real rates higher and pressuring bullion. However, the evolving political landscape presents significant tailwinds, with President-elect Trump's proposed tariff regime threatening to reignite trade tensions and potentially weaken dollar hegemony. Congressional budget negotiations entering a critical phase add another layer of uncertainty, while escalating military engagements in Eastern Europe and the Middle East are accelerating central bank diversification from traditional reserve currencies. These structural shifts in the global monetary order are creating persistent haven demand, evidenced by expanding Asian physical premiums and sustained official sector purchases. Market-implied rate cut expectations remain aggressive at ...bps for 2025, suggesting potential asymmetric upside risk should political tensions catalyse a flight to safety.
From a technical perspective, the market faces immediate resistance at $..., marked by recent consolidation highs and significant options market friction. Above this level, key resistance emerges at $..., defined by monthly highs and substantial call option open interest. Critical support has formed at $..., coinciding with major volume accumulation zones and December's reaction lows. This broader support zone is reinforced by the ...-day moving average convergence and significant put option gamma concentration. A sustained breach below risks accelerating toward the psychological $... level. Price structure and momentum signatures suggest heightened probability of range-bound price action between $...-$... in the immediate term, with medium-term direction likely determined by the evolution of political risk premium versus real yield headwinds.
