gold prices have experienced a pause in their upward momentum, hovering just below the monthly peak of $2,725 as the market takes a moment to regroup ahead of the weekend and the upcoming inauguration of the U.S. President-elect. This consolidation period follows a three-day trend that saw prices surge to near record highs.
Market analysts suggest that while gold is currently in a bullish consolidation phase, a pullback may be on the horizon before prices potentially resume their upward trend toward the all-time high of $2,790. Despite recent stronger-than-expected economic indicators from China, including a GDP growth of 5.4% for the fourth quarter of 2024 — surpassing both expectations and previous figures — gold prices have struggled to find upward traction. Concerns surrounding the Chinese property market and proposed tariffs from the incoming U.S. administration have tempered optimism.
The gold market’s sentiment is being supported by predictions of potential interest rate cuts from the U.S. Federal Reserve, particularly following subdued December inflation data. These dovish expectations have weighed on U.S. Treasury yields and the dollar, further bolstering gold ’s appeal as a non-yielding asset. Recent U.S. economic data has also contributed to this outlook, with disappointing retail sales and rising unemployment claims reinforcing speculation about impending rate reductions.
Investors are closely monitoring upcoming U.S. economic indicators related to housing and industrial production, which could shape the market’s direction. Additionally, profit-taking from recent gains may pose some challenges for gold prices in the short term.
On a technical level, gold prices remain favorable for buyers, maintaining a position above key moving averages. However, vigilance is warranted as resistance is observed at the static level of $2,726, with crucial support awaiting at $2,690 and further down at $2,670. If corrections proceed, a robust support zone near $2,745 could provide essential backing for any potential bounce.
