Key information
- Geopolitical tensions are driving investor demand for safe havens like gold.
- Gold rose to a two-week high as investors sought refuge amid escalating global conflicts, including Russian drone strikes on kyiv and Israel's military actions in Gaza.
- Uncertainty surrounding President-elect Donald Trump's trade policies has also fueled bullish sentiment toward gold.
Geopolitical tensions and economic uncertainty are driving investor demand for safe havens like gold. The precious metal hit a two-week high on Thursday as traders sought refuge from escalating global conflicts, including Russian drone strikes on kyiv and Israel's military actions in Gaza. Uncertainty surrounding President-elect Donald Trump's trade policies has also fueled bullish sentiment toward gold.
Gold Price Drivers
Gold generally benefits from low interest rate environments and economic instability. Traders are closely watching upcoming U.S. economic data, including job openings, ADP employment numbers and minutes from the December Fed meeting. These indicators will influence expectations about the direction of central bank policy in 2025.
Recent performance of gold
Gold has performed strongly in 2024 with more than 27 percent annual gain, its best year since 2010. The surge has been attributed to expectations of rate cuts, central bank buying and geopolitical risks. Analysts believe a price target of $3,000 per ounce remains achievable, with corrections earlier this year potentially paving the way for further bullish momentum.
The effect of the “Trump trade”
The unwinding of the “Trump trade”, which initially supported the US dollar and stocks, could help gold. Trump's proposed tariffs and protectionist policies could introduce inflationary pressures and trigger trade conflicts, both historically bullish factors for gold.
Technical analysis
Technical analysis shows a positive trend for gold (XAU/USD). The metal saw a 1.25 percent rise and ended at $2,656.98 after finding support around $2,590. Immediate resistance lies at $2,675, with a higher barrier around $2,684. A crucial pivot point is the 50-day moving average, which currently sits at $2,659. A sustained move above this level could push gold towards $2,700 in the coming sessions.
Other precious metals
Silver (XAG/USD) also showed strength, rising 2.28 percent to $29.56. The metal has rebounded from key support around $28.75, indicating near-term resistance. Resistance lies at $31.74, with the 50-day moving average providing a barrier at $31.08. The RSI of 43.23 indicates that silver is recovering from an oversold situation, but remains below the midline.
Platinum yield
Platinum (XPT/USD) rose 2.21 percent to close at $921.35 after finding support at $905.43. Despite this rebound, the price remains below the crucial resistance at $945.97. The 50-day moving average, currently at $953.85, limits upward movement. The RSI is at 45.81, indicating moderate momentum. A decisive break above $946 could result in a retest of $960, while failure to maintain current levels could result in a pullback to $895.
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