Gold price forecast dipped below $2,700 during early Monday’s Asian session, reflecting a stronger US Dollar (USD). This movement highlights the mixed dynamics between global economic trends and safe-haven demand. While gold struggles to sustain gains, geopolitical uncertainties and evolving economic policies could influence its trajectory.
Factors Driving the Gold Price Decline
The recent strength of the US Dollar weighed on gold price forecast. Friday’s unexpectedly strong US employment data fueled speculation that the Federal Reserve may avoid aggressive interest rate cuts this year. Markets now anticipate the Fed to reduce rates by just 30 basis points (bps) in 2025, down from the previously expected 45 bps before the jobs report.
Safe-Haven Demand for Gold Remains
Despite the price decline, safe-haven asset demand for gold persists. Uncertainties around potential policies of President-elect Donald Trump’s administration lend some support to the precious metal. David Meger, the Director of Metals Trading at High Ridge Futures, remarked that gold continues to show resilience despite strong employment data. The uncertainty surrounding the U.S. presidential inauguration contributes to its support.”
Geopolitical Tensions Add to Gold Price Pressures
Global conflicts and tensions further impact gold prices. Escalating Middle Eastern conflicts and ongoing Russia-Ukraine hostilities have added complexity. Israeli airstrikes across Gaza and southern Lebanon, as reported by Lebanon’s National News Agency, underline the volatile environment. These developments may continue to affect gold’s appeal as a safe-haven asset.
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