Gold prices (XAU/USD) have been on a consistent upward trend, rising for the third consecutive session on Thursday. With a 27% increase in 2024, this marks its strongest performance since 2010. The current momentum is driven by factors such as US monetary easing, ongoing geopolitical tensions, and record central bank purchases.
Factors Driving Gold Prices Upward Trend
Several factors are contributing to the rise in Gold prices. Firstly, US monetary policy continues to ease, leading to increased investor demand for safe-haven assets like Gold. Additionally, geopolitical tensions, particularly in the Middle East and Russia-Ukraine conflict, have bolstered Gold’s appeal as a traditional safe-haven asset. These tensions are expected to persist, supporting the demand for Gold in the near term.
Potential Headwinds for Gold Prices
Despite the positive momentum, Gold could face challenges as the Federal Reserve is likely to adopt a more cautious approach toward rate cuts in 2025. This shift in monetary policy, influenced by uncertainties surrounding the incoming Trump administration’s economic plans, may result in a hawkish stance. Consequently, non-interest-bearing Gold could encounter headwinds.
Geopolitical Tensions and Safe-Haven Flows
Ongoing geopolitical tensions continue to play a significant role in Gold’s support. As highlighted, the US Dollar Index (DXY) has recently retreated from multi-year highs, trading around 108.30. This weakening of the US Dollar (USD) has made Gold prices more attractive for buyers holding other currencies, further boosting demand.
XAU/USD: Daily Chart Analysis
Gold price is currently trading near $2,630 per troy ounce, with technical indicators suggesting a consolidation phase. The daily chart indicates that Gold has moved above the nine-day and 14-day Exponential Moving Averages (EMAs), signaling a bullish trend in the short term. The 14-day Relative Strength Index (RSI) hovers around the 50 mark, reflecting a balanced market sentiment.
Moreover, the psychological resistance at $2,700 and the monthly peak of $2,726.34, recorded on December 12, may serve as crucial targets. On the downside, immediate support levels include the 14-day EMA at $2,626 and the nine-day EMA at $2,624, with further support at $2,583, its monthly low recorded on December 19.
Conclusion
Gold prices are being supported by a combination of geopolitical uncertainties and central bank activities. Gold continues to demonstrate resilience as investors turn to safe-haven assets. For the latest insights and updates on Gold, visit Daily Gold Signal and explore more at Daily Gold Update.
