Gold prices remained steady on Wednesday, with spot gold trading at $2,650.62 per ounce after a 1% rise in the previous session. U.S. gold futures were also unchanged at $2,665, as competing forces of a stronger dollar and higher Treasury yields offset renewed demand from China.
Picture: Gold consolidates near 2648, holding gains after testing 2664 resistance as momentum moderates, as seen on the VT Markets app.
XAUUSD rose 0.47%, closing near 2648 after testing a high of 2664. The 15-minute chart shows moving averages (MA5, MA10, MA30) continuing to slope upward, indicating sustained bullish pressure.
Gold’s gains were supported by lingering concerns over global economic uncertainty and a slightly weaker US dollar. However, as key resistance near 2664 remains intact, traders appear cautious, awaiting more economic clarity from upcoming macroeconomic data and central bank updates.
The dollar index strengthened, while benchmark 10-year Treasury yields hit an eight-month high, driven by better-than-expected U.S. data.
See also: Dollar Holds Fast Awaiting Key Fed Data
Job openings in November surged to 8.098 million, well above the forecasted 7.7 million and October’s 7.839 million, reinforcing the view that the U.S. economy remains robust.
This data has heightened expectations that the Federal Reserve may slow its pace of rate cuts in 2025. High yields and a strong dollar diminish gold’s appeal by increasing the opportunity cost of holding the non-yielding asset.
Traders are now awaiting the ADP employment numbers and the minutes from the Fed’s December meeting, due later today, for further insight into the central bank’s policy direction.
The highly anticipated U.S. jobs report on Friday could provide additional clues about the Fed’s outlook on inflation and rates. Policymakers remain cautious, as implied by the Fed’s December projections, which highlighted concerns about a resurgence in inflation.
Despite macroeconomic pressures, China’s gold demand remains a supportive factor for prices. Official data from the People’s Bank of China (PBOC) revealed that the country increased its gold reserves for a second consecutive month in December, signalling continued interest in diversifying reserves amid global uncertainty.
China’s sustained buying reflects the metal’s long-term appeal as a store of value, especially in an environment of geopolitical and economic volatility.
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