A tense week for the price of gold
The course ofor (XAU/USD) halts its four-day climb on Monday as markets digest data from Nonfarm Payrolls published last Friday. This slowdown occurs in a context where investors are reassessing the economic outlook and future decisions of the US Federal Reserve (Fed). The possibility of interest rates remaining high for longer continues to weigh on non-yielding assets like gold.
Market tensions and the role of safe haven assets
Faced with economic uncertainty, investors are favoring safe havens like gold and American dollar. These assets, traditionally perceived as safe havens, reflect the market’s wait-and-see attitude as new major economic decisions approach. In this climate, volatility remains high, exacerbated by the prospects of political changes in the United States.
Also read: Gold towards a new price record, according to this expert
Economic factors and market dynamics
This Monday, few major economic data are expected, other than the allocation of short-term Treasury bills by the American government. The yield on 10-year bonds, a key indicator of financial markets, stood at 4.782%, slightly below the peaks reached earlier in the day in Asia. Furthermore, the Commodity Futures Trading Commission (CFTC) will release its report on net speculative gold positions this evening. This document will be closely scrutinized by market analysts for emerging trends.
Focus on mining projects and recent events
International gold projects are also in the spotlight. In Indonesia, Ciemas project activity remains suspended due to a prolonged power outage, attributed to bad weather caused by La Niña. Meanwhile, the Awak Mas project in Sulawesi is preparing to enter production, with an operating contract valued at AUD463 million over seven years, starting in mid-2025.
Technical analysis: critical thresholds to monitor
On a technical level, the price of gold broke through a pennant formation last week, a bullish signal noticed by experts. However, maintaining current support levels is essential to avoid a rollback and a possible bearish breakout. Key levels to watch include the descending trendline at 2 678 $followed by the 55-day and 100-day simple moving averages (SMA), located respectively at 2 652 $ et 2 635 $.
-On the upside, a crossing of resistance at 2 708 $ would pave the way to new heights, with an ambitious goal to 2 790 $thus marking a potential historic record.
Why does gold remain attractive?
For centuries, gold has been an essential value, not only for its rarity and its use in jewelry, but also for its role as aactive refuge. In times of inflation or geopolitical instability, gold acts as a hedge against currency depreciation and economic uncertainty. In 2022, central banks massively increased their gold reserves, illustrating its relevance in diversification strategies.
Outlook for gold and links to other assets
Gold displays an inverse correlation with American dollar and Treasury bills. A falling dollar benefits the yellow metal, while a rise in bond yields tends to penalize it. Stock market dynamics also influence its evolution: a correction in the stock markets often reinforces interest in gold.
In summary, current fluctuations in the price of gold reflect global tensions and investors’ wait-and-see attitude towards future economic developments.
