Key Points:
Gold continues to show strength after-Christmas trading, carving out gains while equity futures like the S&P 500 remain flat. The metal benefits from renewed safe-haven demand amid muted stock market activity as the year draws to a close.
Early Thursday trading saw prices climb by 0.5%, putting gold at $2,630 per ounce — a rally that extends into a second day and positions the metal as a standout performer in thin year-end markets.
Despite upward momentum, overall trading volumes are subdued, reflecting a global market that has largely priced at major risks such as persistent inflation, continued global conflict, and the ongoing effects of war in Europe.
Yet, with gold’s technical indicators painting a nuanced picture, traders are finding opportunities to read between the lines.
Picture: Gold (XAUUSD) hovers around 2628 after a short-term rally, with momentum easing into a holiday-thinned range, as seen on the VT Markets app.
As seen in the chart above, gold is climbing steadily from around 2608 to a high near 2629.63, followed by sideways movement in the 2624–2629 range.
This indicates that initial bullish momentum has eased into consolidation. During such phases, a breakout above the recent peak of 2630 or a drop below short-term support near 2614 often signals the next directional move.
Last week’s softer-than-expected US PCE inflation reading trimmed concerns over the speed of interest-rate cuts in 2024 and 2025.
Although policymakers scaled back their projections for next year, they continue to emphasise data dependence. If inflation remains contained, gold may gain support as yields stabilise or dip.
The US Dollar Index has hovered near two-year highs due to ongoing global uncertainties, but cooler PCE data introduced questions about the pace of future Fed moves.
See also: US Dollar Climbs Near Two-Year High
Any retreat in the dollar tends to brighten gold’s appeal, especially with end-of-year market flows adding extra volatility.
Liquidity often drops around the holidays, which amplifies price swings. Even modest buying or selling pressure can lead to abrupt moves above resistance or below support.
Some traders reduce position sizes or employ tighter stops to cope with rapid shifts.
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