Article by: ETO Markets
Gold prices (XAU/USD) maintain a positive trajectory for the fourth consecutive day, trading near a four-week high amid persistent uncertainties surrounding US President-elect Donald Trump’s proposed tariffs and rising geopolitical risks. These factors bolster gold's appeal as a safe-haven asset, further supported by expectations that Trump's expansionary policies will fuel inflation, reinforcing gold's status as a hedge against rising prices. At the same time, the Federal Reserve’s cautious stance on interest rate cuts, with projections of only two quarter-point reductions in 2025, underpins elevated US Treasury yields and a robust US Dollar, limiting further gold price gains. Key Fed officials, including Susan Collins and Patrick Harker, emphasize a gradual, data-dependent approach to monetary easing as inflation shows signs of progress toward the 2% target, aided by a resilient labor market and steady economic growth. Meanwhile, traders remain cautious ahead of the US Nonfarm Payrolls (NFP) report, anticipated to reveal 160K job additions in December with an unchanged unemployment rate of 4.2%, potentially influencing gold’s momentum and broader market dynamics.
From a technical perspective, gold's breakout above the $… horizontal resistance this week signals a bullish shift, supported by strengthening oscillators on the daily chart. This suggests potential upside toward the $…-$… zone and possibly the $… psychological level. On the downside, pullbacks toward the $… swing low may attract buyers, with additional support at $… and the weekly low near $…-$…. A decisive break below the $… confluence, comprising the 100-day EMA and an ascending trend line from November's low, could mark a bearish reversal.
