Today’s analysis offers a comprehensive examination of the gold markets, highlighting the fundamental and technical factors that are shaping current trends. Our report is designed to empower investors with the insights necessary to navigate these markets successfully.
Gold is currently facing some pressure due to ongoing demand for the US Dollar. It reached a multi-week high of $2,697.88 on Friday, following a strong monthly employment report from the United States that heightened risk aversion. The Nonfarm Payrolls (NFP) report indicated that 256,000 new jobs were added in December, while the unemployment rate fell to 4.1%. These figures are encouraging, with average hourly earnings rising by 3.9%, down from 4%. Together, these indicators suggest that the Federal Reserve may maintain its current stance for an extended period.
While demand for safety supported both gold and the dollar at the end of last week, sustained USD demand has begun to weigh on XAU/USD, which is now trading around $2,665. This week, attention will shift to inflation, with the United Kingdom and the US set to release new Consumer Price Index (CPI) figures next Wednesday. Market participants are also anticipating updates on tariffs from President-elect Donald Trump.
Although sellers have emerged, a significant decline seems unlikely. On January 8, gold confirmed an upside breakout from a month-long symmetrical triangle pattern, reinforcing the prevailing bullish momentum. The 10-, 50-, and 100-day Exponential Moving Averages are aligned, and the 14-day Relative Strength Index remains comfortably above the midline, supporting the potential for further upside in gold prices. Currently, the Stochastic Oscillator is at 72, and the Relative Strength Index stands at 54.
In the dynamic and intricate world of bullion markets, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. Our report aims to offer a balanced perspective to help investors navigate the complexities of gold trading effectively.