- Gold price snaps a two-day winning to a multi-week top amid the Fed’s hawkish stance.
- Retreating US bond yields undermine the USD and lend some support to the XAU/USD pair.
- Traders look to Fed speakers for some impetus ahead of the US NFP report on Friday.
Gold price (XAU/USD) struggles to capitalize on its gains registered over the past two days and attracts some sellers during the Asian session on Thursday. The prospects for slower rate cuts by the Federal Reserve (Fed) assist the US Dollar (USD) to stand firm near a two-year high touched last week and turn out to be a key factor weighing on the non-yielding yellow metal. That said, the cautious market mood, geopolitical risks and trade war fears continue to support the safe-haven commodity.
The flight to safety triggers a modest pullback in the US Treasury bond yields. This, in turn, holds back the USD bulls from placing fresh bets and contributes to limiting the downside for the Gold price. Investors might also opt to wait on the sidelines ahead of the closely-watched US Nonfarm Payrolls (NFP) report on Friday. In the meantime, speeches by a slew of influential FOMC members will be looked upon for short-term trading opportunities later during the US session this Thursday.
Gold price remains depressed amid hawkish Fed-inspired USD strength; safe-haven flows help limit losses
- Automatic Data Processing (ADP) reported that private sector payrolls in the US rose by 122,000 in December, well below November’s increase of 146,000 and missing expectations of 140,000.
- A separate Labor Department report showed Initial Jobless Claims stood at 201,000 in the week ending January 4, marking the lowest reading since February 2024 and pointing to a stable labor market.
- Minutes of the December FOMC meeting showed that policymakers viewed labor market conditions as gradually easing and were in favor of slowing the pace of rate cuts amid stalling disinflation.
- The yield on the benchmark 10-year US government bond shot to its highest level since April 25 on Wednesday, assisting the US Dollar to stand firm near a two-year top and undermining the Gold price.
- CNN reported that US President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries.
- Ukrainian troops endured significant manpower losses in the face of Russia’s relentless assault. Russia’s Defence Ministry said that its forces defeated Ukrainian brigades in Seversk and Chasov Yar.
- Israeli airstrikes continued across the West Bank on Wednesday in the wake of an attack that killed three Israelis on Monday. The Israeli military recovered the body of a hostage from southern Gaza.
- Investors now look to speeches by a slew of influential FOMC members for short-term impetus later during the US session, though the focus will remain glued to the US Nonfarm Payrolls on Friday.
Gold price seems poised to appreciate further; the $2,635 horizontal support holds the key for bulls
From a technical perspective, the overnight swing high, around the $2,670 area, now seems to act as an immediate hurdle, which if cleared will be seen as a fresh trigger for bullish traders. Given that oscillators on the daily chart have started moving in positive territory, the Gold price might then climb to an intermediate resistance near the $2,681-2,683 zone en route to the $2,700 mark.
On the flip side, any further slide is likely to find support near the $2,645 area ahead of the $2,635 region and the weekly low, around the $2,615-2,614 zone touched on Monday. Some follow-through selling below the $2,600 confluence, comprising the 100-day Exponential Moving Average (EMA) and a short-term ascending trend line extending from the November monthly low, will be seen as a fresh trigger for bearish traders. The Gold price might then turn vulnerable to slide further below the December swing low, around the $2,583 area, and test the next relevant support near the $2,550 zone.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | 0.71% | 0.60% | -0.54% | 0.28% | 0.30% | 0.06% | |
| EUR | 0.03% | 0.74% | 0.60% | -0.45% | 0.35% | 0.37% | 0.13% | |
| GBP | -0.71% | -0.74% | -0.16% | -1.17% | -0.38% | -0.36% | -0.61% | |
| JPY | -0.60% | -0.60% | 0.16% | -1.13% | -0.29% | -0.26% | -0.31% | |
| CAD | 0.54% | 0.45% | 1.17% | 1.13% | 0.75% | 0.79% | 0.58% | |
| AUD | -0.28% | -0.35% | 0.38% | 0.29% | -0.75% | 0.02% | -0.23% | |
| NZD | -0.30% | -0.37% | 0.36% | 0.26% | -0.79% | -0.02% | -0.25% | |
| CHF | -0.06% | -0.13% | 0.61% | 0.31% | -0.58% | 0.23% | 0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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