GOLD Price Analysis – Jan 02, 2025
Daily Price Outlook
Gold prices (XAU/USD) continue to climb, staying strong around $2,641 after touching an intra-day high of $2,621.
This bullish momentum is fueled by a mix of factors, including the US adopting looser monetary policies, ongoing geopolitical conflicts, and record-breaking gold purchases by central banks.
Meanwhile, the ongoing Middle East tensions and the Russia-Ukraine war are keeping investors drawn to gold, a reliable safe-haven asset during uncertain times.
Looking ahead, the trend seems likely to continue, especially with a World Gold Council survey hinting that central banks could ramp up their gold buying in 2025, further driving demand.
Impact of a Strong US Dollar and Federal Reserve Policy on Gold Prices
On the US front, the US Dollar Index (DXY), which measures the dollar’s value against six major currencies, has surged to multi-year highs, trading around 108.50. This strength is fueled by the Federal Reserve's hawkish stance on monetary policy.
The Fed has hinted at a cautious approach to rate cuts in 2025 due to persistent inflationary pressures and uncertainties tied to the anticipated economic policies of the incoming Trump administration.
This strong dollar presents challenges for gold prices as it typically dampens demand for the metal by making it more expensive for international buyers.
However, inflation concerns and geopolitical tensions, such as conflicts in the Middle East and Russia-Ukraine, continue to support gold as a safe-haven asset.
Moreover, a World Gold Council survey suggests that central banks may increase their gold purchases in 2025, which could offset the pressure from a stronger dollar and provide further support for gold prices in the long term.
Therefore, the strong US dollar, driven by the Fed's hawkish policy, may put pressure on gold prices by making it costlier for foreign buyers.
However, ongoing inflation concerns, geopolitical tensions, and increased central bank gold purchases could still support gold's demand.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,634.10, marking a 0.38% gain in the last session as bullish momentum persists. On the 4-hour chart, the pivot point at $2,639.79 serves as a critical level. Immediate resistance is positioned at $2,651.73, followed by $2,665.31.
On the downside, support levels are observed at $2,610.53, $2,593.70, and $2,577.23. A break above $2,639.79 could signal continued upside, while failure to sustain this level may invite selling pressure.
Technical indicators reflect a positive bias. The RSI at 67 approaches overbought territory, hinting at strong bullish sentiment but cautioning against possible consolidation.
Gold trades above its 50 EMA at $2,621.94, reinforcing short-term upward momentum. However, the 200 EMA at $2,639.79 aligns closely with the pivot point, underscoring its significance as a decisive threshold.
The immediate outlook suggests that a move above $2,651.73 could attract further buying, targeting $2,665.31. Conversely, a failure to hold above $2,639.79 may lead to a test of the $2,610.53 support level, potentially extending to $2,593.70. Traders are advised to monitor volume and RSI levels for clearer directional cues.
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AUD/USD Price Analysis – Jan 02, 2025
USD/JPY Price Analysis – Jan 02, 2025
Daily Price Outlook
The USD/JPY pair has been showing signs of weakness in recent session, trading below 157.20 level.
One of the main reasons behind this downward trend is the shifting market expectations regarding the Federal Reserve's (Fed) interest rate decisions.
Earlier, the market believed that the Fed might continue to cut interest rates, which weakened the US dollar (USD) and provided some strength to the Japanese yen (JPY).
However, the current situation is different. There is a growing expectation that the Fed might take a more cautious approach with rate cuts in the future, leading to a mixed outlook for the USD/JPY pair.
In addition to this, market participants are also closely watching global economic developments, particularly in the US.
The slowing down of global growth and geopolitical tensions may weigh on market sentiment, affecting the performance of both the USD and JPY.
Despite the Fed's more hawkish stance, the pair's movement remains subdued, indicating a delicate balance between the two currencies.
US Dollar Strengthens Against Japanese Yen Amid Fed's Cautious Rate Cut Approach
On the US front, the broad-based US dollar has been gaining strength recently, which has provided support to the USD/JPY pair.
The recent bet on fewer interest rate cuts by the Federal Reserve this year has driven the USD higher against the Japanese yen.
The Federal Reserve's cautious approach to rate cuts has kept the US dollar elevated, despite some concerns about inflation and economic growth.
The anticipation of the US keeping interest rates higher for longer is a key factor in strengthening the USD.
Furthermore, the possibility of inflationary pressures stemming from proposals such as tariffs could also keep the Fed from making aggressive cuts in rates.
This higher interest rate difference between the US and Japan continues to provide support for the USD/JPY pair, driving the pair toward levels around 157.30.
Japanese Yen Faces Pressure Amid Gradual Economic Recovery and BOJ's Accommodative Policies
On the other side, the Japanese yen is facing pressure due to Japan’s ongoing economic situation. Recently, Bank of Japan (BOJ) Governor Kazuo Ueda mentioned that Japan is moving closer to achieving its 2% inflation target.
This has led to optimism in the market about Japan’s economic recovery. However, the progress toward this inflation target is still gradual, and the BOJ’s policies remain accommodative.
As a result, the JPY is finding it difficult to gain significant strength against the USD. The Japanese authorities are closely monitoring the exchange rate movements, with verbal interventions from officials like Finance Minister Katsunobu Kato, who has suggested that Japan may take measures to combat excessive currency movements. Such interventions aim to limit the yen’s losses, but their effectiveness remains to be seen.
USD/JPY – Technical Analysis
USD/JPY is trading at 156.743, down 0.36% in the last session, reflecting continued selling pressure. On the 4-hour chart, the pivot point is positioned at 157.401, serving as a critical level for directional movement.
Immediate resistance is noted at 158.065, followed by stronger hurdles at 158.742 and 159.672. On the downside, key support levels are seen at 155.965, 155.004, and 154.152, offering protection against deeper declines.
The Relative Strength Index (RSI) at 40 signals bearish momentum but suggests the pair is approaching oversold territory, which may limit further downside in the short term. The 50 EMA at 157.404 indicates that USD/JPY is trading below its short-term trend, reinforcing a bearish outlook.
A break below the immediate support at 155.965 could accelerate selling pressure toward 155.004. Conversely, a move above the pivot point at 157.401 may attract buyers, targeting resistance at 158.065.
Overall, the pair’s trajectory remains influenced by technical levels, with a cautious approach advised near the pivot. Traders should watch for decisive moves either above 157.401 for bullish momentum or below 155.965 for further declines.
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GOLD Price Analysis – Jan 02, 2025
AUD/USD Price Analysis – Jan 02, 2025
Daily Price Outlook
Despite the downbeat Chinese Manufacturing PMI putting pressure on the Aussie Dollar, the AUD/USD currency pair managed to maintain its upward trend, staying well-supported around the 0.6215 level and even reaching an intra-day high of 0.6223.
However, the reason behind this rise can be traced back to the Reserve Bank of Australia's (RBA) comments.
The RBA board suggested that if future economic data aligns with or falls below expectations, it would strengthen confidence in inflation and create the right conditions to begin easing policy restrictions.
On the other hand, stronger-than-expected data might mean that restrictive policies need to stay in place longer.
RBA Governor Michele Bullock also pointed out that the continued strength of the labor market has made the RBA slower than other countries in beginning its monetary easing cycle.
Weaker Chinese Manufacturing PMI Puts Pressure on AUD/USD Amid Global Economic Uncertainty
On the data front, China's Caixin Manufacturing PMI unexpectedly dropped to 50.5 in December, down from 51.5 in November.
The market had expected a reading of 51.7 for the month. Despite the decline, the data still indicates expansion, with manufacturers' output and demand continuing to grow.
The output gauge stayed in expansion for the 14th straight month, and new orders increased for the third consecutive month.
However, growth in both output and new orders slowed compared to November, as production and sales of investment goods fell, and exports were weaker due to ongoing uncertainties in the global economy and trade.
In addition to the Caixin PMI data, China's official Manufacturing PMI, released by the National Bureau of Statistics (NBS), also showed a slowdown, easing to 50.1 in December from 50.3 in November.
This missed market expectations of 50.3. On a positive note, the Non-Manufacturing PMI rose to 52.2, higher than the 50.0 in November and the forecast of 50.2.
Overall, while manufacturing growth slowed, the non-manufacturing sector showed stronger performance, pointing to mixed economic conditions in China as it faces challenges from both domestic and international factors.
Therefore, the weaker-than-expected Chinese Manufacturing PMI data signals economic challenges, which could dampen demand for commodities and impact Australia's export-driven economy.
As a result, the AUD/USD pair may face downward pressure, reflecting concerns about slowing global growth.
US Dollar Strengthens Amid Fed's Hawkish Stance and Global Uncertainties
On the US front, the US Dollar Index (DXY) has surged to multi-year highs, trading around 108.50. This rise is largely due to the US Federal Reserve’s hawkish stance on interest rates.
The Fed has signaled that it may take a more cautious approach to rate cuts in 2025, which has strengthened the US Dollar.
The shift in policy comes as the market anticipates economic strategies from the incoming Trump administration, which creates uncertainty about future policy changes.
In addition to the Fed's stance, rising geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war are expected to support the US Dollar in the short term.
As a safe-haven currency, the USD tends to strengthen during times of global instability. Traders are also cautious about President-elect Trump’s economic policies, particularly the possibility of higher tariffs, which could increase the cost of living.
These concerns, along with the Fed’s recent projections indicating fewer rate cuts in 2025, suggest that the US Dollar will continue to hold its strength due to ongoing inflationary pressures and global uncertainties.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.62044, up 0.24% in the last session, showing a modest recovery from recent lows. The 4-hour chart positions the pivot point at $0.62433, serving as a key level for traders.
Immediate resistance is seen at $0.62755, followed by $0.63058 and $0.63393, highlighting potential upside targets. On the downside, key support levels are positioned at $0.61845, $0.61496, and $0.61208, providing safety nets against selling pressure.
The Relative Strength Index (RSI) at 46 suggests a neutral stance, signaling room for directional moves. The 50 EMA at $0.62185 reinforces a short-term bearish bias as the price remains below this level.
A sustained move below the $0.62203 entry point may trigger additional selling, with a potential target at $0.61693. Conversely, a break above $0.62433 could open the door to a recovery, targeting the $0.62755 resistance zone.
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GOLD Price Analysis – Jan 02, 2025
GOLD Price Analysis – Jan 01, 2025
Daily Price Outlook
Gold (XAU/USD) entered 2025 with bullish momentum after its exceptional performance in 2024. The precious metal gained more than 26% throughout the year, marking its highest annual increase since 2010.
This surge was driven by a combination of factors, including strong demand from central banks, persistent geopolitical instability, and loose global monetary policies. These trends pushed gold to new heights, with the price hitting an all-time record of $2,790.15 on October 31, 2024.
Gold to Remain Supported in 2025 Amid US Dollar Pressure and Geopolitical Risks
Despite a stronger US Dollar and slower Fed rate cuts, gold is expected to remain supported in 2025. The Federal Reserve's cautious stance on rate cuts and uncertainty surrounding economic strategies under the incoming Trump administration are putting pressure on the US Dollar.
However, gold has benefited from rising geopolitical risks, central bank demand, and global monetary easing in 2024. Analysts predict that gold could reach $3,000 per ounce due to continued demand from central banks and the gradual impact of Fed rate cuts.
China's Mixed Economic Data Boosts Gold's Safe-Haven Appeal
On the other hand, China's official Non-Manufacturing PMI showed improvement in December, rising to 52.2 from 50.0 in November, surpassing expectations.
This indicates stronger growth in services and other non-manufacturing sectors, which could be a sign of economic recovery despite the manufacturing slowdown.
However, the official Manufacturing PMI slipped slightly to 50.1, down from 50.3 in November, reflecting weaker performance in the manufacturing sector, although still above the 50.0 mark that separates expansion from contraction.
Meanwhile, home prices in China showed a slight increase in December, with new home prices rising by 0.37% from the previous month. On a year-on-year basis, prices rose by 2.68%, higher than November's growth of 2.40%.
This indicates that the property market is stabilizing, helped by government measures to support homebuying, such as cutting mortgage rates and reducing down payments.
Despite the challenges faced by the property sector, these efforts suggest that China is working to revive the market after a tough period following the debt crisis in 2021.
The mixed economic data from China, including weaker manufacturing and improving services, may increase uncertainty, potentially supporting gold. Gold often benefits from economic slowdowns or instability, as investors seek safe-haven assets during periods of market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,624.26, marking a modest 0.71% gain, as cautious optimism prevails in the precious metals market.
On the 4-hour chart, the pivot point at $2,626.95 is pivotal for defining short-term momentum. Immediate resistance stands at $2,638.91, followed by $2,651.73 and $2,665.31.
On the downside, immediate support lies at $2,593.70, with deeper levels at $2,577.23 and $2,561.89, providing crucial stability if bearish sentiment intensifies.
Gold's technical indicators offer mixed signals. The RSI is at 58, indicating moderate bullish momentum, while the price holds above the 50 EMA at $2,620.66, suggesting near-term strength.
However, the market faces resistance near $2,638.91, making this a critical threshold for further upward movement.
A sustained break above this level could open the path toward higher resistance zones, while failure to breach may reinforce a consolidation or bearish retracement.
Traders should monitor the $2,626.95 pivot point closely, as a decisive move below this level could trigger bearish sentiment, with potential targets at $2,605 and $2,593.70.
Conversely, a break above $2,638.91 would likely attract buyers, setting the stage for further gains.
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EUR/USD Price Analysis – Jan 01, 2025
EUR/USD Price Analysis – Jan 01, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair saw some bullish movement, trading around the 1.0358 level and even reaching an intra-day high of 1.0358. This rebound was largely driven by a weaker US Dollar, which has been under pressure due to declining Treasury yields.
Despite this short-term gain, the Euro faces ongoing challenges as the European Central Bank (ECB) has kept its stance on interest rates dovish for the coming year, which weighs on the Euro. Meanwhile, safe-haven outflows have added pressure to the Euro, especially as global uncertainty grows.
Moreover, the ongoing Russia-Ukraine conflict and tensions in the Middle East have spiked geopolitical risks, making investors more cautious and putting further strain on the Euro. These factors combined are likely to limit the EUR/USD pair's momentum in the near term.
Euro Faces Pressure from Geopolitical Risks and Safe-Haven Flows
On the EUR front, the European Central Bank (ECB) is taking a cautious approach with its interest rate policy for next year, which is weighing on the Euro and the EUR/USD pair. This year, the ECB lowered its Deposit Facility rate by 100 basis points (bps) to 3%.
Looking ahead, it’s expected that the ECB will reduce the rate further to 2% by June 2025, which policymakers consider a neutral rate.
This indicates that the ECB may cut its borrowing rates by 25 bps at each meeting in the first half of 2025, signaling a more dovish stance. As a result, the Euro faces downward pressure, limiting its potential to rise against the US Dollar.
On the other hand, the Euro is facing more challenges due to increased geopolitical risks. The ongoing Russia-Ukraine conflict and tensions in the Middle East are creating uncertainty in the global markets.
Recently, Israel's ambassador to the United Nations warned Yemen's Iran-backed Houthi militants to stop their missile attacks on Israel.
These geopolitical risks are pushing investors to move away from riskier assets, leading to outflows from the Euro. As a safe-haven currency, the US Dollar benefits in such times, further putting pressure on the Euro and the EUR/USD pair.
In addition to the ECB's actions, the Euro is facing more challenges due to rising geopolitical risks. The ongoing Russia-Ukraine conflict and increasing tensions in the Middle East are causing uncertainty in the global markets.
Recently, Israel’s ambassador to the United Nations, Danny Danon, warned Yemen's Houthi militants, backed by Iran, to stop their missile attacks on Israel.
Such geopolitical events tend to drive investors away from riskier assets, including the Euro, and into safe-haven assets like the US Dollar. This added risk further pressures the Euro, limiting its strength against other currencies.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.03549, down 0.49% as bearish sentiment dominates the short-term market outlook. On the 4-hour chart, the pivot point at $1.03441 is critical, acting as a key threshold for near-term momentum.
Immediate resistance is observed at $1.03826, with higher levels at $1.04236 and $1.04581. Conversely, support is positioned at $1.03100, with further protection at $1.02750 and $1.02355, offering potential stabilization in case of extended selling pressure.
Technical indicators highlight bearish conditions, with the RSI at 33, signaling an oversold market ripe for a potential corrective bounce. However, the pair is trading below the 50 EMA at $1.04066, reinforcing a bearish bias in the short term.
A break below the pivot point of $1.03441 could accelerate selling, targeting the $1.03100 support level. On the upside, reclaiming $1.03826 resistance may encourage buyers, potentially driving the price toward $1.04236.
Market participants should closely monitor the $1.03441 pivot point, as sustained trading above it could signal a reversal of the bearish trend.
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GBP/USD Price Analysis – Jan 01, 2025
Daily Price Outlook
During the European trading session on Wednesday, the GBP/USD pair continued its upward momentum, trading around the 1.2523 level, with an intra-day high of 1.2526. This recent rise in the pair can be mainly attributed to a weaker US Dollar (USD), driven by lower US Treasury yields.
Meanwhile, the British Pound (GBP) might face some challenges ahead, especially given the ongoing geopolitical tensions. The Russia-Ukraine conflict and the rising uncertainties in the Middle East are keeping traders cautious.
On top of that, the Pound came under pressure as market participants slightly ramped up their bets on a more dovish Bank of England (BoE) stance for 2025. These factors may challenge the bullish trend for GBP in the near term.
US Dollar Weakness Supports GBP/USD Strength Amid Fed Caution and Lower Treasury Yields
On the US front, the broad-based US Dollar has been under pressure recently. This weakness comes as US Treasury bond yields have dropped by about 2%, with the 2-year and 10-year yields standing at 4.24% and 4.53%, respectively.
The decline in yields has made the US Dollar less attractive to investors, contributing to its subdued performance.
In addition, the Federal Reserve has signaled that it may take a more cautious approach to rate cuts in 2025. This shift in the Fed’s policy outlook adds more uncertainty, as investors are unsure about the direction of future monetary moves.
These factors have contributed to a weaker US Dollar, which in turn has supported the recent rise in other currencies like the British Pound.
Meanwhile, the ongoing uncertainty about future economic strategies, especially with the potential changes under the incoming Trump administration, is adding to the overall volatility in the markets.
Therefore, the weakness of the US Dollar, driven by lower Treasury yields and the Fed's cautious stance on rate cuts, has supported the GBP/USD pair. This has allowed the British Pound to strengthen against the Dollar, driving the pair higher.
British Pound Under Pressure Amid BoE Rate Cut Expectations and Geopolitical Risks
On the flip side, the British Pound has faced some pressure due to traders adjusting their expectations about the Bank of England’s (BoE) policy in 2025. Market predictions now suggest a potential interest rate cut of 53 basis points next year, slightly higher than the 46 basis points expected after the BoE’s December 19 policy meeting.
At that time, the BoE decided to keep rates steady at 4.75%, with a 6-3 vote split. This change in expectations reflects concerns about the UK economy, which could weigh on the Pound in the future.
Moreover, the risk-sensitive Pound faces further challenges due to rising geopolitical tensions. The ongoing Russia-Ukraine conflict and the instability in the Middle East, particularly the situation in Israel and Yemen, are increasing global uncertainty.
Israel’s warning to Yemen on Monday further escalated concerns, adding to the volatility in the markets. These geopolitical risks could negatively affect the Pound, as investors tend to avoid riskier assets in uncertain times, putting pressure on GBP.
GBP/USD – Technical Analysis
GBP/USD is trading at $1.25048, down 0.30% as bearish momentum persists in the market. On the 4-hour chart, the pivot point at $1.25431 serves as a critical threshold for price action, with immediate resistance at $1.26068.
Further resistance levels are observed at $1.26586 and $1.27292, marking potential upside targets if sentiment shifts. On the downside, support is located at $1.24776, with additional levels at $1.24302 and $1.23889 providing safety nets against extended declines.
Technical indicators reflect bearish sentiment. The RSI stands at 38, signaling mildly oversold conditions that could prompt a corrective rebound. However, the pair is trading below its 50 EMA at $1.25438, reinforcing a bearish bias in the short term.
A decisive break below the $1.24776 support level could pave the way for deeper losses, potentially targeting $1.24302. Conversely, reclaiming the pivot point and breaking above $1.26068 resistance may reignite bullish momentum.
Traders should monitor the $1.25431 pivot point closely, as sustained trading below this level suggests continued downward pressure.
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USD/CAD Price Analysis – Dec 31, 2024
Daily Price Outlook
The Canadian dollar (CAD) strengthened slightly against the U.S. dollar (USD) on Monday as the greenback experienced modest losses during light holiday trading.
The USD/CAD pair is trading near 1.4362, reflecting the broader market’s reaction to declining U.S. Treasury yields and shifting investor expectations for Federal Reserve policies in 2025.
While the U.S. dollar has performed strongly throughout 2024, rising by 6.6% on the Dollar Index (DXY), recent geopolitical uncertainties and Canadian resilience have capped USD/CAD’s upward momentum.
The U.S. Federal Reserve’s surprise move to reduce its projected interest rate cuts for 2025—from 100 to 50 basis points—has bolstered the dollar against most global currencies.
However, Canada’s robust economic data, including strong job numbers and steady oil prices, provided support for the CAD, keeping USD/CAD fluctuations limited.
Federal Reserve Policies and Trump Administration Outlook
The Federal Reserve’s cautious stance on rate cuts reflects ongoing concerns over persistent inflation. U.S. Treasury yields dropped by roughly 2% this week, with the 2-year yield settling at 4.24% and the 10-year yield at 4.53%.
Meanwhile, President-elect Donald Trump’s policy agenda—centered on tariffs, tighter immigration rules, and increased fiscal spending—has added further uncertainty to global markets, driving USD gains.
Traders are also eyeing upcoming economic reports, including U.S. unemployment claims and Canadian manufacturing PMI data, which could influence USD/CAD’s trajectory. A favorable outcome for Canada could strengthen the CAD further, while disappointing data may bolster the greenback.
Geopolitical Risks and Canadian Dollar Stability
The Canadian dollar has weathered external pressures better than many emerging-market currencies, which remain vulnerable to the stark interest rate disparity between the U.S. and other economies. Meanwhile, geopolitical tensions, such as the ongoing Russia-Ukraine conflict, have weighed on global risk sentiment, supporting the safe-haven dollar.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.43622, up 0.05%, as it navigates a cautious upward trajectory. The pivot point at $1.44133 serves as a critical marker for directional momentum.
Immediate resistance is positioned at $1.44365, with higher targets at $1.44970 and $1.45508, representing potential barriers for sustained bullish momentum. On the downside, support levels lie at $1.43044, followed by $1.42583 and $1.42108, essential for preventing a deeper pullback.
The pair's price action remains underpinned by its proximity to the 50 EMA at $1.43874, which signals near-term consolidation.
The Relative Strength Index (RSI) at 43 reflects mildly bearish conditions, indicating that the pair is neither oversold nor poised for immediate upside strength.
A break above the pivot point at $1.44133 could validate bullish sentiment, targeting the next resistance at $1.44365. Conversely, slipping below the immediate support at $1.43044 may lead to a decline toward $1.42583.
Economic sentiment surrounding oil prices continues to influence the Canadian dollar, adding volatility to the pair.
Thin year-end liquidity and trader caution could magnify short-term movements. Watch for a decisive break above or below the pivot point to determine the pair's next directional move.
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- GOLD Price Analysis – Dec 31, 2024
GOLD Price Analysis – Dec 31, 2024
Daily Price Outlook
Gold prices are closing out 2024 with a remarkable 26% gain, marking the metal's best annual performance since 2010.
This surge was fueled by robust central bank buying, heightened geopolitical risks, and a wave of monetary policy easing by major central banks. Gold last touched an all-time high of $2,790.15 on October 31, driven by a series of record-breaking rallies throughout the year.
“Rising geopolitical tensions, central bank demand, and renewed inflows into gold-linked Exchange Traded Commodities (ETCs) were key drivers of the rally,” noted Aneeka Gupta, Director of Macroeconomic Research at WisdomTree.
These dynamics made gold one of the top-performing assets of 2024, even as other markets faced headwinds from inflationary pressures and economic uncertainties.
Challenges Ahead: Dollar Strength and Slower Rate Cuts
Despite its stellar run, gold faces potential challenges in 2025. A stronger U.S. dollar and a more cautious Federal Reserve could moderate the metal’s upward momentum.
The Fed’s decision to implement a third consecutive rate cut in December was tempered by a warning of fewer cuts in 2025, reflecting concerns over persistent inflation.
Additionally, the incoming Trump administration’s economic policies—focused on tariffs, deregulation, and tax reforms—are expected to introduce further volatility into global markets. Such uncertainty, however, could bolster gold’s appeal as a safe-haven asset.
“Gold could continue to thrive in 2025 if geopolitical tensions escalate under Trump’s leadership, drawing investors toward this time-tested safe haven,” said Han Tan, Chief Market Analyst at Exinity Group.
2025 Outlook: Could Gold Hit $3,000?
Analysts remain optimistic about gold’s trajectory in the coming year. Goldman Sachs commodities strategist Daan Struyven projects prices could reach $3,000 per ounce, citing sustained central bank demand and renewed interest in gold ETFs as key factors.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,608.34, up 0.10%, as cautious optimism dominates amid low-volume, year-end trading. The pivot point at $2,620.16 remains critical, with prices struggling to sustain upward momentum.
Immediate resistance lies at $2,638.91, with further barriers at $2,651.73 and $2,665.31. On the downside, support is found at $2,593.70, followed by $2,577.23 and $2,561.89, key levels for maintaining bearish momentum.
The 4-hour chart reveals gold trading just below its 50 EMA at $2,620.02, signaling near-term weakness. The Relative Strength Index (RSI) stands at 43, reflecting mild bearish sentiment without indicating oversold conditions.
A break above $2,620.16 could shift momentum upward, targeting resistance at $2,638.91. Conversely, failure to hold above the pivot point may lead to declines, testing support at $2,593.70.
Gold’s price action is being shaped by broader market sentiment, with traders balancing geopolitical risks and expectations of the Federal Reserve’s 2025 rate policy.
A breakout above $2,638.91 would suggest renewed buying interest, while a decisive drop below $2,593.70 could accelerate selling pressure.
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AUD/USD Price Analysis – Dec 31, 2024
Daily Price Outlook
The Aussie Dollar (AUD) was quiet against the US Dollar (USD) after China released its December Manufacturing and Non-Manufacturing PMI numbers. China’s official Manufacturing PMI came in at 50.1, down from 50.3 and missed expectations. Non-Manufacturing PMI jumped to 52.2, up from 50.0 and above expectations of 50.2.
As Australia’s largest trading partner, we feel the ripples of China’s economic movements. The weak manufacturing data has us worried about exports, while the bounce in the service and construction sectors is a glimmer of hope.
RBA and Market Sentiment
RBA minutes showed the board is cautiously optimistic on inflation. They reiterated that they will keep rates on hold until inflation is more clearly stable. RBA Governor Michele Bullock said Australia’s labour market is more resilient than other countries so they can delay rate cuts compared to other central banks.
US Dollar Index (DXY) held around 108.00 as expectations of fewer Fed rate cuts in 2025. US Treasury yields fell on Monday with 2-year at 4.24% and 10-year at 4.53%. This left the AUD exposed to external winds and geopolitics.
Geopolitics and Economic Policy
Russia-Ukraine conflict and Middle East tensions added to the risk premium on the AUD. Traders are also worried about President-elect Trump’s policies and tariffs will increase costs. Add to that the Fed’s reluctance to cut rates and we have market uncertainty.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.62160, down 0.07%, reflecting continued bearish sentiment. The pivot point at $0.62433 acts as a critical juncture, with the pair struggling to regain upward momentum.
Immediate resistance lies at $0.62755, followed by $0.63058 and $0.63439, marking key levels for a potential bullish recovery. On the downside, support levels are seen at $0.62004, with deeper protection at $0.61576 and $0.61208.
The 4-hour chart shows the pair trading below its 50 EMA at $0.62257, signaling near-term weakness in the broader downtrend. The Relative Strength Index (RSI) is at 45, reflecting neutral-to-bearish conditions without signaling oversold levels.
A decisive break below the support at $0.62004 could intensify selling pressure, targeting the next critical level at $0.61576. Conversely, a move above $0.62433 would invalidate the bearish setup and may pave the way for a recovery toward $0.62755.
Market sentiment remains cautious as traders weigh concerns over global growth prospects and subdued commodity demand, which often weighs on the Australian dollar.
With thin year-end liquidity, the pair's movement will depend heavily on holding critical support levels while breaking resistance at $0.62433 for bullish momentum to emerge.
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EUR/USD Price Analysis – Dec 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to hold onto its modest gains and edged lower around the 1.0415 level, hitting an intraday low of 1.0409.
This downward move can largely be attributed to a combination of factors, including the thin trading volume due to year-end liquidity, which is common during the holiday season.
Moreover, the Euro has also faced bearish pressure in the final months of 2024, with a near 5.5% decline against the US Dollar (USD) as the European Central Bank (ECB) stuck to its dovish stance on interest rates, disappointing investors who had hoped for a more aggressive approach to combat inflation.
Meanwhile, the concerns over the Eurozone’s economic health have been mounting, particularly with the threat of tariff hikes under US President-elect Donald Trump. These tariffs are expected to negatively impact the Eurozone’s export-driven economy.
US Dollar Strength and Its Impact on EUR/USD Amid Economic Data and Fed Expectations
On the US front, the broad-based US dollar has been gaining strength, consolidating near a four-day support level as trading volume remains thin during the year-end period.
The Greenback is on track to close the year near its highest level, with higher Treasury yields providing a strong boost.
US bond yields have been rising recently as investors expect the policies under President-elect Trump, like higher tariffs and tax cuts, to drive economic growth and inflation.
The Fed has already signaled fewer interest rate cuts for 2025 in its latest projections, with Federal Fund rates expected to be around 3.9% by the end of the year.
After a hawkish rate cut in December, Goldman Sachs predicts the Fed will cut rates again in March, with two more cuts expected in June and September.
This week, investors are focused on the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for December, due on Friday. The PMI is expected to drop slightly to 48.3 from 48.4, indicating that manufacturing output is slowing down at a slightly faster pace.
Therefore, the strengthening US dollar, driven by higher Treasury yields and Fed policy expectations, puts downward pressure on the EUR/USD pair.
ECB’s Dovish Policy and US Tariff Concerns Weigh on the Euro
On the EUR front, the EUR/USD currency pair is set to close the year with a nearly 5.5% decline against the US Dollar, largely due to the European Central Bank’s (ECB) dovish stance on interest rates.
The Euro has been especially weak in the last three months of 2024, as market participants are concerned about the Eurozone’s economic growth.
This worry is compounded by the incoming tariff hikes from US President-elect Donald Trump, which are expected to negatively impact the Eurozone’s export sector.
The ECB has already lowered its Deposit Facility rate by 100 basis points to 3% this year, and it’s expected to cut it further to 2% by the middle of 2025.
This would indicate that the ECB plans to lower its key borrowing rates by 25 basis points at each meeting during the first half of next year.
Many ECB officials are concerned about inflation falling below their target of 2%, particularly with the political uncertainty in Germany and potential trade tensions with the US.
Therefore, the ECB's dovish stance and anticipated rate cuts, combined with concerns over Eurozone growth and US trade tensions, are likely to weaken the Euro further.
As a result, EUR/USD is expected to remain under pressure, potentially leading to continued declines.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04223, up 0.03% in the latest session, reflecting mild bullish sentiment as the pair hovers just below its pivot point at $1.04430. This level serves as a critical juncture for directional movement.
A sustained move below the pivot suggests bearish momentum, with immediate support at $1.03843 and further downside targets at $1.03430 and $1.03003.
Resistance levels are clustered at $1.04753, $1.05029, and $1.05453, forming a significant barrier for any upward movement.
The Relative Strength Index (RSI) at 54 indicates neutral to slightly bullish momentum, with no signs of overbought conditions. Meanwhile, the pair is trading slightly above the 50 EMA, which sits at $1.04117, signaling modest support for short-term gains.
The 4-hour chart reveals consolidation near the pivot point, suggesting indecision among traders. A sell strategy below $1.04427 with a target of $1.03836 and a stop loss at $1.04752 aligns with current technical trends.
However, a decisive breakout above $1.04430 could pave the way for testing the resistance at $1.04753. Market participants should remain vigilant as the pair navigates this critical zone, with key U.S. data releases likely to shape sentiment.
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