Article by: ETO Markets
Gold prices (XAU/USD) are struggling to build on recent gains, pressured by a firm US Dollar near a two-year high, supported by expectations of slower rate cuts by the Federal Reserve. Despite this, geopolitical risks, trade war concerns, and a cautious market mood continue to bolster gold as a safe-haven asset. A modest pullback in US Treasury bond yields prevents further USD strength, helping to limit gold's downside. Meanwhile, data from the US showed a weaker-than-expected ADP report with private payrolls rising by just 122,000 in December, while jobless claims dropped to 201,000, suggesting labor market stability. The December FOMC meeting minutes revealed a preference for slower rate cuts, further supporting the USD. As investors await the US Nonfarm Payrolls report on Friday, they also look to speeches from influential FOMC members for short-term trading opportunities. Geopolitical tensions, including tensions in Ukraine and Israel, add to the flight to safety, which limits gold's losses.
From a technical perspective, the overnight swing high around the $... level acts as an immediate hurdle for gold, and if surpassed, it could trigger further bullish momentum. Oscillators on the daily chart have moved into positive territory, suggesting the potential for a rise toward intermediate resistance at $...-$..., possibly reaching the $... mark. On the downside, any further decline is likely to find support near the $... area, followed by the $... region and the weekly low around $...-$.... A break below $..., where the 100-day Exponential Moving Average (EMA) and a short-term ascending trendline converge, would signal a bearish shift, potentially pushing gold towards the December swing low at $..., with the next key support near the $... zone.
