The gold price is regaining its positive momentum on the back of new US dollar selling at the beginning of a new week.
Bets that the Fed will pause its interest rate cutting cycle may limit XAU/USD amid a positive risk tone.
Traders are now eagerly awaiting the inaugural speech of US President-elect Donald Trump to gain new momentum.
Gold price (XAU/USD) is attracting some bearish buyers at the start of a new week and is riding on its steady intraday rise during the early European session. The US dollar is attracting new sellers and eroding much of the positive move on Friday amid bets that the Federal Reserve will cut interest rates twice this year. This appears to be the main factor helping the non-yielding metal halt its rebound decline from the one-month high reached last Thursday.
Meanwhile, expectations that US President-elect Donald Trump’s protectionist policies could lead to higher inflation and force the Federal Reserve to adhere to its hawkish stance may limit deeper US dollar losses. This, coupled with easing tensions in the Middle East and a generally positive tone in equity markets, may limit safe-haven gold price gains. Traders may also refrain from placing aggressive bets and choose to wait on the sidelines before Trump’s inauguration speech.
The price of gold continues to receive support from the weakness of the US dollar, ahead of Trump’s inauguration
- The price of gold recorded gains for the third week in a row amid bets that the Federal Reserve may not rule out the possibility of cutting interest rates further in 2025, which would benefit the price of gold.
- Expectations were raised by the US Producer Price Index (PPI) and Consumer Price Index (CPI) released last week, indicating that US inflationary pressures eased in December.
- In addition, Federal Reserve Governor Christopher Waller said last Thursday that inflation is likely to continue to decline and allow the US central bank to cut interest rates sooner and faster than expected.
- The US dollar is struggling to benefit from Friday’s positive move, which, coupled with concerns over devastating trade tariffs imposed by US President-elect Donald Trump, is supporting the safe-haven XAU/USD pair.
- Against the backdrop of the ceasefire agreement between Israel and Hamas, hopes that Trump will ease the restrictions imposed on Russia in exchange for reaching an agreement to end the Ukrainian war remain supportive of the positive risk tone.
- Furthermore, the US central bank is expected to pause its interest rate cutting cycle later this month amid expectations that Trump’s policies could stoke inflation, limiting the non-yielding yellow metal.
- Traders may also refrain from placing aggressive directional bets ahead of Trump’s inauguration speech later Monday and a US holiday in observance of Martin Luther King Jr. Day.
The technical setup for gold price appears to be favoring upward movement; $2700-2690 holds the key
From a technical perspective, any subsequent upside move will likely encounter some resistance near the $2,715 area before the $2,724-2,725 area, or the one-month high touched last Thursday. Given that the oscillators on the daily chart are gaining positive momentum, some subsequent buying should pave the way for a move towards the medium hurdle at $2745 on the way to the $2760-2762 area. The XAU/USD pair may eventually aim to challenge the all-time peak, around the $2,790 area reached in October 2024.
On the other hand, any meaningful decline below the $2,700-2,690 immediate support can be viewed as a buying opportunity and remains limited near the $2,662-2,662 area. The latter should act as a pivot point, below which gold price could fall to the $2635 area on its way to the $2615-2620 confluence zone – which includes a short-term uptrend line extending from the November swing low and the exponential level. Over 100 days. Moving Average (EMA).
US dollar price today
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed today. The US dollar was the strongest against the Swiss franc.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.35% | -0.33% | -0.05% | -0.10% | -0.35% | -0.28% | 0.01% | |
| euro | 0.35% | -0.04% | 0.18% | 0.15% | 0.06% | -0.04% | 0.23% | |
| GBP | 0.33% | 0.04% | 0.19% | 0.18% | 0.11% | -0.01% | 0.27% | |
| JPY | 0.05% | -0.18% | -0.19% | -0.05% | -0.27% | -0.34% | -0.13% | |
| Canadian | 0.10% | -0.15% | -0.18% | 0.05% | -0.19% | -0.18% | 0.09% | |
| Australian dollar | 0.35% | -0.06% | -0.11% | 0.27% | 0.19% | -0.19% | 0.13% | |
| New Zealand dollar | 0.28% | 0.04% | 0.00% | 0.34% | 0.18% | 0.19% | 0.09% | |
| Swiss franc | -0.01% | -0.23% | -0.27% | 0.13% | -0.09% | -0.13% | -0.09% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
