As the final trading week of 2024 begins, holiday-related low liquidity has kept gold prices (XAU/USD) stable within a narrow range around $2625 per ounce. We anticipate this trend to persist until investor participation increases post-holiday. Despite current muted activity, the fundamental factors supporting gold’s upward potential, particularly global geopolitical tensions, remain in place.
Gold Price Outlook: Will XAU/USD Increase Today?
Gold prices are showing cautious stability, according to trading platforms. Investors are closely watching the Federal Reserve’s monetary policy and the potential for new tariffs expected to be implemented by the incoming US President. Recent weak inflation data, reflected in the Personal Consumption Expenditure Price Index, has challenged the Federal Reserve’s hawkish stance, suggesting possible further interest rate cuts, which is generally positive for gold. Financial markets are anticipating significant political changes in 2025, including tariffs, deregulation, and tax reforms.
Geopolitical Tensions Drive Gold Prices Higher
Gold remains a favored safe haven asset, bolstered by ongoing geopolitical risks stemming from the Russia-Ukraine conflict and Middle East tensions. In 2024, gold prices have risen significantly due to a more accommodative US monetary policy, increased global uncertainty, and sustained aggressive gold purchases by central banks.
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Gold’s outlook remains highly positive. Driven by strong performance, the price of gold has surged over 27% in 2024, marking its best annual gain since 2010.
US Dollar Maintains Strong Performance
Data from licensed trading platforms shows the US Dollar Index (DXY) holding steady around 108, near its two-year high, while US Treasury yields are increasing. Despite the Federal Reserve cutting interest rates, the US dollar has remained strong, supported by the expectation of a slower pace of monetary easing in 2025. Furthermore, anticipation of Donald Trump’s policies—including deregulation, tax cuts, higher tariffs, and stricter immigration—has boosted the dollar by creating expectations of stronger growth, inflation, and sustained high Treasury yields. The US dollar’s resilience is demonstrated by a 2.1% gain in the last month of 2024, bringing its year-to-date rise to 6.6%.
XAU/USD Analysis: Today’s Outlook
Technical analysis of the daily gold price chart indicates a waiting pattern. The Relative Strength Index (RSI) suggests a neutral market, with neither bulls nor bears dominant, awaiting a strong catalyst for movement. We maintain a preference for buying on dips, with key support levels at $2,618, $2,605, and $2,578 per ounce. While the Stochastic indicator leans bearish, we continue to favor buying on any price pullbacks, with the same support levels of $2,618, $2,605, and $2,578.
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