Gold prices climbed to a four-week high, fueled by safe-haven demand and prevailing market uncertainties. The metal rose 0.35% to trade at $2,671, marking its third consecutive day of gains. Concerns about US policies and the UK’s financial challenges have fueled this trend.
Safe-Haven Demand Boosts Gold Prices
The surge in gold prices comes amid market concerns over potential economic policies. Recent reports suggest that US President-elect Donald Trump may declare a national economic emergency to justify imposing tariffs. Meanwhile, the United Kingdom faces a budget crisis, with Gilt yields hitting their highest levels since 1998.
Federal Reserve Officials Signal Caution
Federal Reserve officials have taken center stage during market closures for the National Day of Mourning for former US President Jimmy Carter. Fed Governor Michelle Bowman stressed caution in adjusting interest rates, while Kansas City Fed’s Jeffrey Schmid suggested rates are near neutral. Other officials, like Patrick Harker and Susan Collins, highlighted the uncertainty surrounding economic conditions.
Key Data Releases in Focus
Traders are closely monitoring December’s US Nonfarm Payrolls data and the University of Michigan Consumer Sentiment index. These indicators are expected to provide further insights into economic trends and labor market health.
Market Movers and Gold’s Performance
Gold prices remain resilient despite higher US real yields, which rose to 2.29%. The US Dollar Index (DXY) climbed 0.16% to 109.18. Meanwhile, the US Challenger Jobs report showed a decline in layoffs, with December’s figure at 38,792 compared to November’s 57,727.
Federal Reserve easing expectations also dropped slightly, with the December Fed funds futures contract pricing in 54 basis points of cuts. The World Gold Council reported the first inflow into gold-backed exchange-traded funds in four years, further supporting gold prices.
Gold’s Technical Outlook
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Gold prices have consistently advanced, supported by the 50-day Simple Moving Average (SMA) at $2,646. This upward momentum has propelled XAU/USD toward the $2,670 area. Key resistance levels lie at $2,700 and $2,726, with an all-time high of $2,790 in sight.
If gold drops under the 50-day SMA, it may reach the 100-day SMA near $2,630. Additional downward movement could find support around $2,600 or near the 200-day SMA at $2,500.
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