GOLD Analysis
Afternoon: Gold Holds Steady Amid Mixed Economic Signals and Geopolitical Uncertainty
Highlights:
- Rising US Treasury yields exerted pressure on gold prices but were offset by geopolitical developments.
- Federal Reserve’s cautious rate outlook, bolstered by Lisa Cook's comments, supports gold stability.
- Critical U.S. and Euro Zone economic data are expected to influence gold prices in the near term.
Overview:
Gold prices stabilized around $2,630 despite upward pressure from rising US Treasury yields. Early in the session, the precious metal experienced a decline of up to 1% but later pared its losses after President-elect Donald Trump refuted claims of scaling back his tariff policies, as reported by the Washington Post. Trump's dismissal of the report injected market optimism, supporting gold's recovery due to its safe-haven appeal during periods of geopolitical tension.
Market participants remain cautious as they await critical U.S. labor market data and minutes from the Federal Reserve's last policy meeting, which could shape future interest rate expectations. Recent comments from Fed Governor Lisa Cook emphasized the central bank's restrained stance on rate cuts, citing a robust labor market and lingering inflationary pressures as reasons for maintaining a cautious approach. The Fed’s perspective on interest rates remains a pivotal factor influencing gold's trajectory, given its inverse relationship with yields.
In the Euro Zone, Core CPI Flash Estimate y/y and CPI Flash Estimate y/y are expected to provide further insights into inflation trends, while key U.S. data, including ISM Services PMI and JOLTS Job Openings, may drive market sentiment in the coming sessions.
Recommended Strategy
Action: Buy on dips near $2,632, targeting $2,654, with a stop-loss below $2,620.
Support and Resistance Levels:
