Gold continues its upward momentum, touching an intraday high of $2,702.22 and closing near $2,699.45, its highest level in over a month. This marks a sustained upward trend for gold, supported by lower-than-expected U.S. core inflation data that raised hopes for further Federal Reserve rate cuts this year.
The December Consumer Price Index (CPI) report showed slower inflation growth, prompting investors to anticipate a less aggressive Fed policy stance. This reduced fears of higher interest rates, which typically diminish the appeal of non-yielding assets like gold.
Gold’s rally was reinforced by a decline in U.S. Treasury yields and a weaker dollar. The drop in yields reduced the opportunity cost of holding gold, while the softer dollar made bullion more affordable for foreign buyers.
The dollar index trimmed earlier gains, reflecting cautious sentiment ahead of the Federal Reserve’s January policy meeting.
Gold closed at 2699.45, maintaining a steady upward trajectory, peaking at 2702.22 during the last session. Moving averages align bullishly, though MACD signals suggest momentum could slow. Immediate support lies at 2693.09, with resistance at 2702.22 and potential for 2710 if momentum holds. A dip below support may push prices toward 2685.
Picture: Gold (XAU/USD) surges towards $2,700, maintaining bullish momentum as key resistance levels come into focus, as seen on the VT Markets app.
Expectations for a 25-basis-point rate cut at the June Fed meeting have risen sharply. Still, the Fed will likely keep rates steady at 4.25%-4.50% during its January 28-29 policy meeting.
Inflation concerns persist, with traders weighing the potential for tariff-driven price pressures under the Trump administration.
Meanwhile, a ceasefire deal between Hamas and Israel has eased immediate Middle East tensions, but the region remains volatile, keeping gold attractive as a safe-haven asset.
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