Gold Prices Eye Gains Amid Holiday Week, Fed’s 2025 Path in Focus

Gold prices edged higher on Tuesday, trading at $2,618.89, as holiday-thinned volumes characterized the market.

Investors braced for the Federal Reserve’s less aggressive interest rate cuts in 2025, which weighed on gold’s appeal. Following a year of robust gains—up nearly 27% so far, marking the best performance since 2010—gold remains sensitive to shifting monetary policy.

The Fed’s December meeting hinted at a tempered path for easing rates, projecting just 35 basis points of cuts for 2025. Although Friday’s benign U.S. inflation reading eased some concerns, uncertainty over trade policies under President-elect Donald Trump has reignited gold’s safe-haven allure. Kelvin Wong, senior market analyst at OANDA, noted that retaliatory trade sanctions could trigger market volatility and boost gold demand.

Technical Outlook: Gold (XAU/USD)

Gold spot prices are attempting recovery after recent declines, trading at $2,618.89. Key resistance lies at $2,627.75, followed by $2,639.67 and $2,663.60. On the downside, immediate support is at $2,602.41, with further levels at $2,580.87 and $2,560.71.

The 50-day EMA aligns with the pivot point at $2,621.75, suggesting a potential reversal area. The RSI sits at 51.85, indicating consolidation but lacking clear momentum. A sustained break above $2,627.75 could shift the bias toward bullish, targeting $2,639. Conversely, a dip below $2,602 may prompt further selling pressure.

GOLD Price Chart - Source: Tradingview

Gold’s Record Year and Market Risks

Gold’s stellar performance in 2024 has been fueled by central bank buying, geopolitical tensions, and monetary policy easing by major economies. However, market sentiment remains cautious as the U.S. prepares for policy shifts under Trump’s administration. Trade tariffs, deregulation, and potential tax changes could ripple through markets, creating uncertainty for 2025.

Traders should closely monitor these factors while keeping an eye on durable goods data and holiday trading liquidity, which might amplify price swings.

Key Insights:

  • Gold faces resistance at $2,627.75, targeting $2,639.67 on a bullish break.

  • Immediate support is at $2,602.41, with further downside at $2,580.87.

  • RSI at 51.85 indicates neutral momentum; EMA levels suggest cautious optimism.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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