Gold Hits $2,713: Bullish Vibes or Pullback Incoming?

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MARKETS TREND

Gold prices remained firm near $2,713, their highest level since mid-December, as growing expectations for Federal Reserve rate cuts continue to support the precious metal.

Buoyed by soft U.S. inflation data and dovish comments from Federal Reserve officials, gold is set to close its third consecutive week of gains, cementing its status as a key hedge against economic uncertainty.

Inflation Data Fuels Rate-Cut Speculation

This week’s December inflation report, showing a modest 0.2% increase in core CPI, has reinforced the market’s belief that the Federal Reserve will ease monetary policy in the months ahead. With annual inflation steady at 2.9%, Fed Governor Christopher Waller stated that three or four rate cuts remain on the table if economic data further weakens.

Investor sentiment has now shifted toward the possibility of at least two rate cuts this year, with the first anticipated as early as May. Lower interest rates tend to weaken the U.S. dollar and reduce Treasury yields, which enhances the appeal of non-yielding gold as a hedge against inflation and economic uncertainty.

“Gold’s resilience reflects a shift in market dynamics, particularly amid rising uncertainty about future fiscal policies,” said Ajay Kedia, director at Kedia Commodities.

 

XAU/USD

Technical Analysis: Gold Holds Bullish Momentum

Gold remains within a strong upward channel, with prices consolidating near $2,713 after reaching an intraday high of $2,717. The pivot point at $2,724 is a critical resistance level for the short term. Breaking above this level could propel prices toward higher targets at $2,743, $2,762, and $2,788.

On the downside, support is observed at $2,695, followed by $2,678 and $2,657. The 50-day EMA at $2,678 underscores short-term stability, while the 200-day EMA at $2,657 provides longer-term support. However, overbought conditions near key resistance zones may trigger a short-term pullback.

Outlook: Key Drivers Ahead

With President-elect Donald Trump set to begin his second term, markets are closely monitoring his policy direction. Analysts expect inflationary pressures to rise under the new administration, which could further bolster gold’s safe-haven appeal.

GOLD Price Chart - Source: Tradingview

Additionally, upcoming U.S. economic data, including retail sales and weekly jobless claims, will provide traders with more clarity on the Federal Reserve’s next steps.

Key Insights in Bullet Points:

  • Gold consolidates near $2,713, with a bullish pivot at $2,724.

  • Resistance levels: $2,743, $2,762, and $2,788; support at $2,695.

  • Fed rate-cut expectations and inflation data boost gold’s momentum.

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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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