GOLD Price Analysis – Jan 14, 2025
Daily Price Outlook
Gold (XAU/USD) continued its upward trend, reaching a high of $2,675, fueled by reports that President-elect Donald Trump’s economic advisers are considering a gradual increase in tariffs to avoid inflation spikes.
This news prompted a slight pullback in US Treasury bond yields, lending support to gold, a non-yielding asset. However, despite the boost, the precious metal's upward momentum remains capped, hindered by the Federal Reserve's hawkish stance on interest rates.
On the other hand, the previously released robust US Nonfarm Payrolls (NFP) report from Friday reinforced the Fed’s outlook, fueling expectations for a slower pace of interest rate cuts in the US. Consequently, the US Dollar (USD) found support, stalling its recent decline after hitting a two-year peak on Monday.
US Labor Market Data and Federal Reserve Outlook
On the data front, the NFP report for December showed a strong increase of 256,000 jobs, significantly exceeding market expectations of 160,000 and surpassing the revised November figure.
This has further solidified expectations for a more gradual pace of rate cuts, as emphasized by several Federal Reserve officials.
Kansas Fed President Jeffrey Schmid noted that most of the Fed’s targets have been met, suggesting that any future rate cuts will be slow and data-dependent.
In other developments, China’s central bank pledged to support the Chinese Yuan, and the People's Bank of China (PBOC) raised the macro-prudential adjustment parameter for cross-border financing.
Meanwhile, inflation in the US, as measured by the TD-MI Inflation Gauge, saw a significant acceleration, climbing by 0.6% month-over-month in December, reinforcing concerns about inflation pressures.
Therefore, the strong NFP report and expectations of slower rate cuts from the Fed support the US Dollar and Treasury yields, limiting gold's upside potential.
Meanwhile, rising US inflation concerns may pressure gold as a non-yielding asset, reducing its appeal.
As traders await the upcoming US Producer Price Index (PPI) report, the market remains in wait-and-see mode for further economic data and developments that could influence the direction of gold and broader markets.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,669.19, up 0.22%, as the metal sustains modest upward momentum, driven by a retreat in U.S. Treasury bond yields. The price remains above the critical pivot point at $2,687.13, signaling a cautiously bullish sentiment.
Immediate resistance stands at $2,696.72, with higher targets at $2,710.98 and $2,724.66. On the downside, key support levels are at $2,645.00, followed by $2,627.99 and $2,614.89, providing strong safety nets for potential corrections.
The 50-day EMA at $2,657.96 underscores short-term support, confirming that the broader trend remains upward. However, gold's momentum is tempered by the Federal Reserve's hawkish policy outlook and steady U.S. bond yields, which cap significant price gains.
A sustained break above $2,696.72 could pave the way for higher levels, while a drop below $2,687.13 may trigger selling pressure, potentially testing lower supports.
The Relative Strength Index (RSI) signals neutral territory, suggesting limited immediate momentum but scope for a directional breakout. Traders should monitor the $2,687.13 pivot closely; holding above it supports bullish continuation, while a breach could indicate bearish pressure.
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- AUD/USD Price Analysis – Jan 14, 2025
AUD/USD Price Analysis – Jan 14, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has rebounded strongly extending gains for the second consecutive day and recovering from 0.6131, its lowest level since April 2020.
This resurgence is fueled by robust commodity prices and improved global market sentiment, which supported risk-sensitive assets like the AUD.
However, economic challenges persist in Australia. The Westpac Consumer Confidence Index fell for the second month in a row, dropping 0.7% in January to 92.1 points, signaling consumer pessimism.
Meanwhile, markets are factoring in a 75% probability of a rate cut by the Reserve Bank of Australia (RBA) in February, keeping the AUD/USD pair under pressure.
Traders are eyeing the upcoming Australian employment data, which could provide further insights into the RBA’s policy trajectory.
US Dollar Strength and Its Impact on the Pair
On the US front, the broad-based US Dollar continues to exert pressure on the AUD/USD pair, supported by strong economic data and a hawkish outlook from the Federal Reserve.
The US Dollar Index (DXY) remains near 109.60, its highest level since November 2022, reflecting sustained demand for the greenback.
On the data front, the December’s Nonfarm Payrolls (NFP) data exceeded expectations, showing a robust 256,000 job additions, compared to forecasts of 160,000.
This robust labor market data has pushed US Treasury yields higher, with the 2-year yield at 4.42% and the 10-year yield at 4.80%.
Federal Reserve policymakers, including Kansas Fed President Jeffrey Schmid, have emphasized the need for a measured approach to rate cuts in 2025, reinforcing the USD’s strength.
Additionally, the upcoming US Producer Price Index (PPI) report is expected to provide further clarity on inflation trends, which could influence the Fed’s rate decisions and the trajectory of the AUD/USD pair.
China's Economic Stimulus and Its Ripple Effect on AUD/USD Amid Australia's Domestic Challenges
On the other hand, China’s economic developments remain a critical factor influencing the AUD, given Australia’s close trade ties with its largest trading partner.
The People’s Bank of China (PBOC) recently announced measures to support the Chinese Yuan, including raising the macro-prudential adjustment parameter for cross-border financing.
These measures are intended to maintain ample liquidity and stabilize China’s financial markets, indirectly benefiting the AUD through strengthened demand for Australian exports.
PBOC Governor Pan Gongsheng reaffirmed China’s commitment to bolstering the global economy, highlighting plans to utilize fiscal and monetary tools to sustain growth.
This optimism has provided additional support for the AUD/USD pair, as improved Chinese economic conditions typically lead to increased demand for Australian commodities.
Domestically, Australia’s TD-MI Inflation Gauge surged by 0.6% month-over-month in December, the largest monthly increase since 2023, complicating the RBA’s policy outlook.
Despite these challenges, China’s stimulus measures offer some relief for the AUD, underscoring the intertwined economic relationship between the two nations.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.61918, up 0.26%, as the Australian Dollar shows slight recovery amid a stabilizing U.S. Dollar. The price remains below the pivot point at $0.62071, maintaining a bearish tone despite the recent uptick.
Immediate resistance is located at $0.62615, with higher levels at $0.62898 and $0.63274. On the downside, support stands at $0.61781, with deeper thresholds at $0.61488 and $0.61208.
The 50-day EMA at $0.62069 aligns closely with the pivot point, reinforcing its significance as a key decision level. A break above $0.62071 may shift sentiment toward bullishness, potentially targeting the immediate resistance zone.
Conversely, failure to hold above this pivot point could trigger renewed selling pressure, targeting the $0.61480 region.
The Relative Strength Index (RSI) suggests neutral momentum, indicating that the market could go either way depending on the break of key levels.
While the near-term outlook leans bearish, a decisive break above $0.62071 would challenge the prevailing sentiment.
Traders should monitor U.S. economic data and commodity trends, as these remain critical drivers for the Australian Dollar’s trajectory.
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GBP/USD Price Analysis – Jan 13, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair has continued its bearish slide, struggling to find any support and remaining around 1.2149.
It even touched an intra-day low of 1.2123. This downward movement can be attributed to ongoing concerns over the UK's economic troubles, with stubborn inflation and stagnant growth fueling worries of stagflation. The British Pound (GBP) has been facing significant pressure as a result.
Meanwhile, the US dollar surged to its highest level in over two years on the back of strong US jobs data released on Friday.
This combination of weak economic data from the UK and a stronger US Dollar has been pushing the GBP/USD pair lower.
GBP Struggles Amid Stagflation and Rising Bond Yields, Weighing on GBP/USD
On the GBP front, the British Pound (GBP) continues to struggle, primarily due to concerns about stagflation in the UK. Stubborn inflation combined with weak economic growth has created a challenging environment for the currency.
This combination is raising fears that the UK economy may remain stuck in a difficult situation for longer, keeping the GBP under pressure.
In addition to economic struggles, the recent increase in UK government bond yields is adding to the anxiety about the country’s financial stability.
Rising bond yields signal that investors may be worried about the UK's fiscal health, which is weakening confidence in the Pound.
Therefore, the UK’s economic struggles, including stagflation and rising bond yields, are weakening the British Pound (GBP).
Meanwhile, the US Dollar (USD) strengthens due to positive economic data. As a result, the GBP/USD pair is likely to continue its bearish trend.
US Dollar Strengthens on Positive Jobs Data, Weighing on GBP/USD Outlook
On the US front, the broad-based US dollar has gained strong momentum, reaching a two-year high against other currencies.
This surge was triggered by positive US jobs data, particularly the Nonfarm Payrolls (NFP) report, which showed the US economy added 256,000 jobs in December.
This exceeded expectations and boosted confidence in the US economy. Additionally, the unemployment rate dropped unexpectedly to 4.1%, reinforcing the view that the Federal Reserve (Fed) may maintain its aggressive stance on interest rates.
Investors are now expecting the Fed to pause its rate-cutting cycle at its upcoming policy meeting. Some are even speculating that the Fed may raise interest rates later this year, further supporting the US dollar.
As a result, US Treasury bond yields are likely to remain elevated, which adds to the strength of the US dollar.
This bullish outlook for the dollar, coupled with a risk-off sentiment in the market, is putting pressure on other currencies, including the British Pound (GBP).
However, the Relative Strength Index (RSI) on the daily chart for the GBP/USD pair is showing signs of being slightly oversold.
This suggests that the pair may experience a period of consolidation or a modest bounce before continuing its downward movement.
Investors may want to wait for a more favorable entry point before positioning for further declines in GBP/USD.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.21306, down 0.53% on the day, reflecting continued selling pressure amid a stronger U.S. dollar.
The 4-hour chart indicates that $1.21993, the pivot point, serves as a critical barrier for any potential recovery. Below this level, immediate support is located at $1.20880, with subsequent targets at $1.20174 and $1.19346.
On the upside, resistance levels are positioned at $1.23209, $1.24064, and $1.24962. The 50-day EMA at $1.24042 underscores a bearish outlook, with prices consistently trading below this trend indicator.
The RSI suggests a continuation of bearish momentum, though it approaches oversold territory, hinting at a possible consolidation phase.
The preferred strategy is to enter short positions below $1.22011, with a target of $1.20898 and a stop-loss set at $1.22710.
A sustained breach of the immediate support at $1.20880 could accelerate selling pressure, while a rebound above the pivot point might provide an opportunity for bulls to retest resistance levels. Traders should monitor the pair closely for volatility near these key levels.
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EUR/USD Price Analysis – Jan 13, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has been under significant pressure, sliding to a fresh two-year low near 1.0200 as the week begins.
This sharp decline is largely attributed to the strengthening of the US Dollar (USD), which has been performing well amidst soaring bond yields.
The US Dollar Index (DXY), which tracks the Greenback’s performance against six major currencies, has surged to nearly 110.00, marking the highest level seen in over two years.
Moreover, the Euro (EUR) is facing strong selling pressure due to a combination of factors, including a generally bleak market sentiment.
Investors are growing increasingly risk-averse as fears mount over the potential economic fallout from protectionist policies under US President-elect Donald Trump.
There are rising concerns that these policies could lead to a global trade war, which would undermine the stability of international markets and diminish the appeal of risk-sensitive assets like the Euro.
This growing uncertainty has left the EUR/USD pair vulnerable, with investors turning to the US Dollar as a safe-haven amidst the prevailing global economic jitters.
EUR/USD Faces Pressure Amid Global Trade Concerns and ECB's Dovish Stance
On the EUR front, the Euro (EUR) is facing significant selling pressure due to weak market sentiment. Investors are becoming more cautious as fears grow that US President-elect Donald Trump’s protectionist policies could lead to a global trade war.
During his campaign, Trump threatened that the European Union (EU) would face heavy penalties for not buying enough American exports, raising concerns about economic tensions between the US and Europe.
At home, the Euro is also under pressure from expectations that the European Central Bank (ECB) will continue to ease its monetary policy.
ECB Chief Economist Philip Lane recently suggested that more interest rate cuts are likely as the central bank seeks to prevent the economy from slowing down too much.
He mentioned that the ECB’s approach should be balanced, avoiding being too aggressive or too cautious in its decisions this year.
In addition to this, ECB policymaker Boris Vujčić commented that he is comfortable with market expectations for more interest rate cuts, but he pushed back against ideas of speeding up the current pace of easing.
Vujčić emphasized the need for gradual cuts in interest rates, given the uncertainty surrounding the global economy. This ongoing policy stance has kept the Euro weak, as investors remain wary of the ECB's actions.
Therefore, the combination of global trade war concerns, ECB's policy easing expectations, and cautious sentiment towards the Euro has led to continued weakness in EUR/USD, causing the currency pair to experience selling pressure and a downward trend.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.02137, down 0.26% on the day, reflecting bearish momentum as the dollar strengthens. On the 4-hour chart, the pivot point at $1.02487 serves as a crucial threshold for the pair’s short-term direction.
A sustained break below this level could push prices toward immediate support at $1.01664, with further downside targets at $1.01118 and $1.00691.
Resistance levels remain intact at $1.03198, $1.03632, and $1.04534. Notably, the 50-day EMA at $1.03232 highlights a bearish bias, with prices trading consistently below this average.
The RSI confirms downward momentum, although it is nearing oversold territory, which could signal a potential short-term consolidation.
The recommended strategy is to enter short positions below $1.02478, targeting $1.01656 while managing risk with a stop-loss at $1.02947.
A decisive break below $1.01664 could trigger an accelerated bearish move, while a rebound above the pivot point might shift sentiment toward the resistance zones.
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- GOLD Price Analysis – Jan 13, 2025
GOLD Price Analysis – Jan 13, 2025
Daily Price Outlook
Gold prices (XAU/USD) struggled to halt their bearish trend, lingering around the 2,687 mark and touching an intra-day low of 2,679.
However, the main catalyst for this decline was stronger-than-expected U.S. jobs data, which suggested a healthier job market and reduced the likelihood of aggressive interest rate cuts by the Federal Reserve. This provided a boost to the U.S. dollar, further pressuring gold prices.
Traders, who had initially hoped for rate cuts, quickly adjusted their expectations after the robust nonfarm payrolls report, which dampened the outlook for future rate reductions.
As a result, gold's appeal as a safe haven diminished, with higher interest rates making non-interest-bearing assets like gold less attractive.
However, gold prices did not experience a sharp decline due to ongoing uncertainty surrounding the economic outlook, particularly with the potential changes under U.S. leadership. This uncertainty has kept some demand for gold intact.
US Labor Data and Fed's Hawkish Stance Push Gold Lower
On the U.S. front, the US dollar remains strong, holding near a two-year peak, while U.S. Treasury yields have stayed elevated at their highest levels in over a year. This strength in the USD and yields has put pressure on gold prices, which do not offer yield.
The catalyst for this shift is the upbeat U.S. Nonfarm Payrolls (NFP) report, which has reinforced expectations that the Federal Reserve (Fed) will pause its rate-cutting cycle this month.
On the data front, the U.S. Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls increased by 256,000 in December, significantly surpassing market expectations of 160,000, as well as the previous month's figure of 212,000. Moreover, the Unemployment Rate dropped unexpectedly to 4.1% from 4.2%.
Despite these positive numbers, there was some relief for inflation concerns as annual wage growth, measured by Average Hourly Earnings, slowed to 3.9%.
This strong labor market data highlights the resilience of the U.S. economy, diminishing the likelihood of further rate cuts.
Therefore, the strong U.S. labor market data, including robust Nonfarm Payrolls and lower unemployment, reduces the likelihood of Fed rate cuts.
This strengthens the U.S. dollar and Treasury yields, making gold less attractive, leading to downward pressure on its price.
Geopolitical Tensions Drive Safe-Haven Demand, Supporting Gold Prices
On the geopolitical front, persistent global tensions have heightened investor demand for safer assets, providing some support for gold prices.
Recent developments, including increased sanctions by the U.S. and U.K. against Russia’s oil industry, have added to market uncertainty.
These sanctions, targeting nearly 200 vessels in Russia’s shadow fleet, have further strained the global market.
Moreover, ongoing military actions between Russia and Ukraine have escalated, with reports of intensified strikes by Russian forces on Ukrainian military targets, including airfields and vehicles.
The continued use of drones, missiles, and artillery underscores the growing instability, boosting demand for gold as a safe-haven asset.
Tensions in the Middle East also remain elevated, with violations of the ceasefire agreement between Israel and Hezbollah, as well as ongoing Israeli strikes in Gaza.
These geopolitical uncertainties have further fueled demand for gold, as investors seek protection from increasing instability in key regions around the world.
GOLD (XAU/USD) – Technical Analysis
Gold prices are trading at $2,686.40, down 0.12% on the day, as markets navigate between conflicting technical signals. The 4-hour chart highlights $2,679.88 as the critical pivot point.
A break above this level could push prices toward immediate resistance at $2,705.44, with further targets at $2,724.66 and $2,741.68. However, if prices fail to hold above $2,679.88, immediate support lies at $2,663.62, followed by stronger levels at $2,645.00 and $2,614.89.
The 50-day EMA at $2,652.30 confirms a bullish undertone, with prices consistently trading above this average.
However, the RSI signals consolidation, suggesting reduced momentum. Traders should monitor for a potential breakout above $2,680 to confirm a bullish continuation. On the downside, a break below $2,663 could lead to a sharper decline.
The current strategy suggests entering long positions above $2,680 with a target of $2,704, placing stop-loss orders at $2,663 to manage risk effectively.
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S&P500 (SPX) Price Analysis – Jan 10, 2025
Daily Price Outlook
The S&P 500 index is currently trading at the 5,918 level, having reached an intra-day high of 5,927, reflecting a notable upward trend.
The index’s growth is driven by several key factors, including strong corporate earnings and investor optimism surrounding the US economy.
Despite some headwinds, particularly concerns about inflation, the overall sentiment has been positive, especially as US companies continue to report solid earnings results. This has bolstered investor confidence in the broader market.
Moreover, the Federal Reserve’s stance on rate cuts and its cautious approach toward further monetary tightening have provided further support to risk assets like equities.
Investors are also anticipating a recovery in key sectors, such as technology and consumer goods, which is boosting the overall index performance.
US Dollar and Economic Data's Impact on S&P 500
The US Dollar's strength, bolstered by recent economic data, plays a crucial role in shaping the performance of the S&P 500.
The Fed’s policy stance, which signals fewer rate cuts in the coming months, has led to higher yields on US Treasury bonds, supporting the USD’s positive momentum.
Hence, the stronger dollar tends to exert pressure on US exporters by making their goods more expensive overseas, potentially impacting earnings growth in international markets.
However, the overall economic backdrop, including job growth and inflation data, continues to favor the broader equity market.
In particular, strong job numbers and resilient consumer spending have helped maintain investor optimism, which is evident in the positive movements of the S&P 500 index.
The anticipated data release for the US Nonfarm Payrolls (NFP) report may influence the market further, with any positive surprise likely to provide additional momentum for the index.
Geopolitical Instability and Its Indirect Impact on the S&P 500 Index
On the geopolitical front, recent developments in Ukraine and Israel have also had an indirect impact on market sentiment.
Investors tend to seek safety in times of geopolitical instability, which can lead to increased volatility in equity markets like the S&P 500.
Despite this, the index has managed to maintain an upward trajectory, reflecting a balance between positive economic indicators and the ongoing geopolitical risks that could influence investor behavior.
S&P 500 – Technical Analysis
The S&P 500 index (SPX) is trading near the pivot point of 5918.26, reflecting a cautious yet optimistic market tone.
Immediate resistance is seen at 6011.99, with further upside targets at 6099.55 and 6175.48. On the downside, immediate support lies at 5834.66, followed by deeper levels at 5764.34 and 5672.94.
The 50 EMA, positioned at 5997.91, highlights resistance to the ongoing bullish trend, signaling that bulls must clear this hurdle to sustain upward momentum. RSI readings hover near neutral, suggesting consolidation before a potential breakout.
A sustained move above 5918.26 could pave the way for gains toward 6011.99, with further buying interest likely targeting 6099.55.
Conversely, failure to hold above the pivot may trigger a retest of support at 5834.66, where a break could shift sentiment toward bearish territory.
Market participants are closely monitoring key economic data, particularly the U.S. labor report, for its potential impact on Federal Reserve policy.
A strong breakout above 6011.99 would confirm bullish momentum, while sustained pressure below 5834.66 may signal a deeper correction.
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EUR/USD Price Analysis – Jan 10, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair edged lower on the day as the market sentiment remained cautious.
The pair traded with a mild negative bias around 1.0300 on Friday. This decline comes as the US dollar continues to gain strength, fueled by the Federal Reserve’s decision to hold off on any interest rate cuts for the time being.
The Fed’s stance on rates has provided support to the Greenback, creating some selling pressure on the euro.
On the other side of the Atlantic, the Eurozone's Retail Sales figures, released on Thursday, failed to offer much support for the euro.
Eurostat reported a 1.2% year-on-year increase in retail sales for November, although it was lower than the revised 2.1% rise seen in October.
With the focus shifting to US employment data, the euro seems to be under pressure as market participants weigh the potential outcomes.
Fed’s Cautious Stance on Rate Cuts Strengthens US Dollar, Weighing on EUR/USD
On the US front, the broad-based US dollar has been rising as the Federal Reserve’s decision to delay interest rate cuts continues to support the Greenback.
This is putting some pressure on the EUR/USD pair. Traders are waiting for the US December Nonfarm Payrolls (NFP) report, which is expected later on Friday.
This report could offer important insights into the US job market and influence future Fed decisions.
Several Fed officials have shown caution about cutting interest rates, mainly due to ongoing inflation concerns and uncertainty surrounding the incoming Donald Trump administration.
For example, Susan Collins, President of the Fed Bank of Boston, said that the uncertainty in the economic outlook suggests the Fed should be careful with rate cuts.
Moreover, Fed Governor Michelle Bowman mentioned that she believes the Fed should keep rates steady until there is clear evidence that inflation is decreasing.
These hawkish comments from Fed officials could help strengthen the US dollar against the euro in the short term.
Therefore, the Federal Reserve’s cautious stance on rate cuts and inflation concerns are strengthening the US dollar.
This puts downward pressure on the EUR/USD pair, as a stronger dollar makes the euro less attractive in comparison, leading to a potential decline.
Euro Faces Pressure as Retail Sales Slow, but HICP Data Offers Some Support
On the EUR front, the Eurozone’s Retail Sales figures failed to provide much support for the euro. Data released by Eurostat on Thursday showed that retail sales increased by 1.2% year-on-year in November, but this was a slowdown compared to the revised 2.1% rise in October.
This weaker retail sales growth did not help lift the euro ahead of the key US employment data expected later on Friday.
However, there is some positive news for the euro. The Eurozone's preliminary Harmonized Index of Consumer Prices (HICP) data for December has pushed back expectations that the European Central Bank (ECB) will make a large interest rate cut.
This could help limit the euro's losses for now, as traders may feel more confident about the ECB's stance, which provides some support for the shared currency in the short term.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.02969, reflecting mild bearish sentiment as it dips below the pivot point at $1.03423.
The pair faces immediate resistance at $1.04424, with further upside barriers at $1.05222 and $1.06035.
On the downside, immediate support lies at $1.02240, followed by deeper levels at $1.01664 and $1.01118.
The 50 EMA at $1.03471 signals bearish momentum as prices hover below this critical moving average. RSI readings remain neutral, indicating limited directional bias for now.
However, a sustained break below $1.03423 could accelerate bearish momentum, driving the pair toward key support levels. Conversely, a recovery above $1.03423 may trigger a bullish reversal, targeting $1.04424.
Market participants are closely monitoring broader economic cues, including U.S. Nonfarm Payrolls data and ECB commentary, which could impact the euro's trajectory.
A decisive move below the $1.03423 pivot point will likely validate bearish sentiment, paving the way for further declines.
On the flip side, a break above $1.03423 could signal a near-term recovery toward $1.04424 and higher levels.
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- GOLD Price Analysis – Jan 10, 2025
GOLD Price Analysis – Jan 10, 2025
Daily Price Outlook
Gold prices have been climbing steadily, recently reaching around $2,674 per ounce, with a peak at $2,675. This upward trend is largely due to ongoing uncertainties about U.S. President-elect Donald Trump's proposed tariffs and rising geopolitical tensions. These factors are making investors nervous, leading them to seek the safety of gold.
Gold is often seen as a safe investment during times of economic or political instability. As concerns grow over potential tariffs and global conflicts, more people are turning to gold to protect their wealth.
Another reason why gold is rising is because people expect Trump's expansionary policies could lead to higher inflation, making gold a good way to protect against rising prices. This has helped keep gold strong in the market.
At the same time, there’s a belief that the Federal Reserve might ease up on cutting interest rates, which has helped keep US Treasury bond yields high and the US Dollar close to a two-year peak.
A stronger dollar could make gold less attractive though, as it becomes more expensive for people holding other currencies.
Traders are also cautious and waiting for the US Nonfarm Payrolls (NFP) report, which could influence market sentiment. Nonetheless, the XAU/USD pair is still on track to finish the week with gains, marking its second consecutive week of upward movement.
US Dollar Strengthens Amid Fed's Hawkish Signals and Economic Data
On the US front, the US Dollar Index (DXY), which tracks the dollar’s performance against six major currencies, remains steady above 109.00.
The dollar has gained support from hawkish signals in the Federal Reserve's meeting minutes and uncertainties surrounding the incoming Trump administration’s trade and tariff plans.
These factors have kept the Greenback strong, with the Federal Reserve signaling that controlling inflation may take longer than expected.
The minutes mentioned that recent inflation readings have been hotter than anticipated, and changes in trade and immigration policies under Trump could delay efforts to manage inflation.
In addition, Federal Reserve officials are working hard to address market reactions to a much slower pace of rate cuts in 2025 than many had expected.
Kansas Fed President Jeffrey Schmid recently stated that the Fed has met most of its targets and that interest rate policy is approaching a long-term balance.
He emphasized that future rate cuts should be gradual and based on economic data. On the economic data front, US Initial Jobless Claims fell to 201,000 for the week ending January 3, beating expectations.
Meanwhile, the ADP Employment Change in December was 122K, below the expected 140K. The ISM Services PMI for November rose to 54.1, above the forecast of 53.3, signaling growth in the services sector.
However, the Prices Paid Index, which tracks inflation, rose sharply, indicating that inflationary pressures remain a concern.
Therefore, the strengthening US Dollar, driven by hawkish Federal Reserve signals and inflation concerns, could limit gold’s price gains.
Hence, the stronger dollar makes gold more expensive for holders of other currencies, reducing demand and weighing on its value.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,673.04, reflecting modest gains as it holds above the pivot point at $2,663.62. The 4-hour chart indicates a cautiously bullish sentiment, with immediate resistance at $2,687.65.
A breakout above this level could propel prices toward the next targets of $2,704.34 and $2,724.66. On the downside, immediate support lies at $2,662.44, with deeper levels at $2,603.20 and $2,583.91.
The 50 EMA at $2,641.87 reinforces the short-term bullish momentum, as the price remains above this level. RSI readings hover near neutral, suggesting room for further upside if bullish momentum strengthens.
However, traders should monitor price action closely near the pivot, as a sustained break below $2,663.62 could shift sentiment bearish, driving a move toward key support at $2,624.44.
Market participants are focused on geopolitical risks and upcoming U.S. economic data, particularly the Nonfarm Payrolls (NFP) report.
These factors could significantly influence gold's near-term trajectory. A close above $2,687.65 would validate bullish momentum, targeting higher resistance levels. Conversely, failure to hold above the pivot risks a deeper pullback to the lower support zones.
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AUD/USD Price Analysis – Jan 09, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its losing streak, staying under pressure around the 0.6193 level.
The main reason for its downward rally can be traced to disappointing domestic economic data and concerns about China’s economic outlook.
China's Consumer Price Index (CPI) data, released on Thursday, showed that inflation is facing deflationary risks. In December, the annual inflation only rose by 0.1%, slightly lower than November's 0.2% increase, which aligned with market expectations.
Besides this, traders are awaiting Friday’s US Nonfarm Payroll (NFP) report, as it may provide further direction for US Federal Reserve policy.
The US Dollar (USD) has been supported by hawkish signals from the Federal Open Market Committee (FOMC) meeting minutes and growing concerns over potential tariff plans under the incoming Trump administration.
US Dollar Strengthens Amid Strong Economic Data, While Australian Dollar Faces Pressure from Soft Inflation
On the US front, the broad-based US dollar has been holding strong, with the US Dollar Index (DXY) staying near the 109.00 level.
The Greenback is benefiting from hawkish signals in the Federal Reserve's (Fed) meeting minutes, as well as concerns over tariff plans from the incoming Trump administration. This strength in the dollar is also supported by rising US Treasury bond yields.
Moreover, the US labor market data provided positive signals. Initial Jobless Claims fell to 201,000, better than the expected 218,000. Meanwhile, the ADP Employment report showed a gain of 122K jobs in December, although this was below market expectations of 140K.
The ISM Services PMI also showed strong growth, rising to 54.1 from 52.1, beating the 53.3 forecast. The Prices Paid Index, a key inflation measure, also increased, indicating that inflationary pressures remain present.
Therefore, the strong US Dollar, supported by positive economic data and rising bond yields, puts pressure on the AUD/USD pair, likely causing the Australian Dollar to weaken further against the Greenback.
In contrast, the Australian Dollar (AUD) is facing challenges due to softer inflation data. Australia's core inflation, measured by the trimmed mean, fell to 3.2% annually from 3.5%, bringing it closer to the Reserve Bank of Australia's (RBA) target range of 2-3%. This has led traders to expect a potential interest rate cut from the RBA.
Australia's CPI rose 2.3% year-over-year in November, slightly above expectations, but it remains within the RBA’s target range. Despite this, there is a growing expectation of a rate cut in the coming months.
Hence, the softer inflation data and expectations of an interest rate cut by the RBA are likely to weigh on the Australian Dollar, potentially leading to further weakness in the AUD/USD pair.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.61964, down 0.28%, as bearish sentiment dominates amid global risk-off conditions. The pair is struggling to maintain ground above its pivot point at $0.62190, signaling potential downside risks.
The 50 EMA at $0.62228 has turned into a near-term resistance level, further weighing on the currency pair. The RSI is hovering in bearish territory, reflecting subdued momentum.
Immediate resistance is located at $0.62730, followed by $0.63058 and $0.63393, marking levels to watch for any bullish recovery.
On the downside, immediate support lies at $0.61781, with stronger support at $0.61488 and $0.61208. A sustained move below the pivot point could trigger further selling pressure, targeting the $0.61781 level initially, followed by $0.61530.
Traders considering short positions might look to enter below $0.62172, targeting $0.61530 with a stop-loss at $0.62523.
While the pair remains bearish in the short term, a break above $0.62190 and the 50 EMA could signal a reversal, paving the way for a test of $0.62730.
However, the broader trend remains cautious as the pair reacts to key technical and macroeconomic drivers.
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USD/JPY Price Analysis – Jan 09, 2025
Daily Price Outlook
During the European trading session, the USD/JPY currency pair extended its bearish trend, remaining under pressure around the 158.17 level, before hitting an intra-day low of 157.76.
Despite Japan's strong wage growth data, there’s uncertainty about when the Bank of Japan (BoJ) will raise interest rates again, which has been holding back the yen. Meanwhile, the widening yield gap between the US and Japan, fueled by the Federal Reserve’s hawkish stance, continues to weigh on the yen.
However, speculation that Japanese authorities might step in to support the yen is preventing aggressive selling. This, along with global geopolitical risks and concerns over US President-elect Donald Trump’s protectionist policies, is providing some support for the yen.
On the flip side, the recent pullback in US bond yields due to a flight to safety has kept the USD bulls on the defensive, limiting the extent of the dollar's strength.
This cautious sentiment in the market is putting a lid on the USD/JPY pair's movement, as the yen's safe-haven appeal is offering some support, despite the broader strength of the US dollar.
Impact of BoJ Data and US Policy Uncertainty on USD/JPY Pair Volatility
On the BoJ front, government data released this Thursday showed Japan's base salary increased by 2.7% in November, marking the fastest rise since 1992.
Overtime pay also saw growth, rising 1.6% from the previous month's 0.7% gain. However, inflation-adjusted real wages fell for the fourth month in a row, dropping by 0.3%.
This came as the inflation rate used for wage calculations jumped from 2.6% in October to 3.4% in November. The BoJ has said that sustained wage increases are necessary for raising borrowing costs, and these figures provide a modest boost to the Japanese yen.
Despite this positive data, investors remain skeptical that the BoJ will raise rates in its January meeting. Many expect the BoJ to wait until March, partly due to uncertainty over US President-elect Donald Trump's potential protectionist policies.
CNN reported that Trump is considering declaring a national economic emergency to justify imposing tariffs on both allies and adversaries, which sent the yield on the 10-year US government bond to its highest level since April 25.
This overshadowed the mixed labor market data from the US, which showed a slower-than-expected rise in private sector jobs for December but a drop in unemployment claims to an 11-month low.
Looking ahead, market focus will remain on speeches from influential FOMC members later today, but the most important event will be Friday's US Nonfarm Payrolls (NFP) report.
Investors are keen to see how the US labor market is performing and how this could impact future interest rate decisions by the Federal Reserve. The mixed economic data, combined with the uncertainty surrounding US policies, is adding volatility to global markets, including the USD/JPY pair.
Therefore, the data and uncertainty surrounding the BoJ’s rate hike and US policies contribute to volatility in the USD/JPY pair. A cautious market sentiment, influenced by mixed economic data and geopolitical risks, may limit significant movements in the pair.
USD/JPY – Technical Analysis
USD/JPY is trading at 157.930, down 0.25%, reflecting a bearish tone as the pair struggles to hold above key technical levels. The pivot point at 158.475 remains a critical marker, and the pair's inability to reclaim this level suggests further downside pressure.
The 50 EMA at 157.544 acts as near-term resistance, aligning with broader selling momentum. RSI readings indicate bearish sentiment, with the pair at risk of deeper declines if momentum persists.
Immediate resistance lies at 159.406, followed by 160.406 and 161.117, which may limit any bullish recovery.
On the downside, immediate support is found at 156.904, with further levels at 155.975 and 154.924 offering potential buffers against an extended selloff. A sustained move below the pivot point could trigger a decline toward 156.904 and beyond.
Traders considering short positions may look to sell below 158.448, targeting 156.904 while setting a stop-loss at 157.074.
A break above 158.475 would be required to negate the bearish outlook, paving the way for a test of 159.406. With a cautious sentiment prevailing, traders should monitor price action near the pivot for further clues on directional strength.
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