The U.S. Dollar Index (USDIDX) gains more than 0.3% today, but 10-year U.S. Treasury yields fall to 4.53%, a drop of more than 4 basis points, combined to disappointing data from China, leading to a continued rise in gold prices at the start of the year.
- Investors weigh the risk of a slowdown in China, the European Central Bank’s increasingly dovish stance as well as potential changes in the U.S. Federal Reserve’s outlook for future interest rates amid the climb of Trump in power, which, despite the “basic pro-dollar outlook”, could ultimately prove to be a positive catalyst for gold prices. Gold (GOLD) growth today stands at 0.8%, while in the last session of 2024, prices of the metal increased by more than 0.5%.
- This development is not without influence on political and economic risks, particularly in China and Europe, where the economy is slowing down sharply. This should result in a dovish position of the ECB and the PBoC in 2025.
- China’s manufacturing PMI data, released this evening, showed 50.5 for December, well below the expected 51.7 and November’s 51.5. For the markets, this means that the People’s Bank of China will likely be forced to take more radical measures to support the economy in 2025 if it wants to revive consumption.
- On the other hand, some trend toward “dedollarization” is evident in central banks seeking an asset to store value in the face of a downturn or high inflation.
- Thus, in 2025, the United States will probably only make a few rate cuts (but the markets are counting on them being almost certain), while Europe and China could ease their policy even more decisively. Long-standing central bank buying and rising geopolitical risks are driving gold prices, which have gained 27% y/y in 2024. If this dynamic repeats in 2025, gold prices would reach around $3,000 per ounce.
- Trump’s proposed tariffs and protectionist policies are likely to be inflationary and could trigger trade wars. Therefore, despite the impact on higher yields, gold could remain important and maintain its upward momentum, thus finding itself as a so-called “safe haven”. The current high interest rates in the United States continue to reduce demand for gold, but the metal is doing very well.
OR (graph H1)
Looking at the daily range, the main resistance on GOLD is seen around $2680 – $2710 per ounce (previous price reactions, Fibonacci retracement), the smallest resistance line in the short-term downtrend. Crossing this level could pave the way for new historical maximums for bullion.
Source: xStation5
“This content is a marketing communication within the meaning of Article 24(3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/ 92/EC and Directive 2011/61/EU (MiFID II) The marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy. within the meaning of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Delegated Regulation (EU) 2016/958 of the Commission of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards regulatory technical standards relating to technical arrangements for the objective presentation of investment recommendations or ‘other information recommending or suggesting an investment strategy and for the disclosure of special interests or indications of conflicts of interest or any other advice, including in the field of investment advice, within the meaning of Article L321-1 of the Monetary and Financial Code. All information, analyzes and training provided are provided for informational purposes only and should not be interpreted as advice, a recommendation, a solicitation for investment or an inducement to buy or sell financial products. XTB cannot be held responsible for the use made of it and the resulting consequences, the final investor remaining the sole decision-maker regarding the position taken on their XTB trading account. Any use of the information mentioned, and in this regard any decision taken in relation to a possible purchase or sale of CFDs, is the exclusive responsibility of the final investor. It is strictly prohibited to reproduce or distribute all or part of this information for commercial or private purposes. Past performance is not necessarily indicative of future results, and anyone acting on such information does so entirely at their own risk. CFDs are complex instruments and carry a high risk of rapid loss of capital due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You need to make sure that you understand how CFDs work and that you can afford to take the likely risk of losing your money. With the Limited Risk Account, the risk of losses is limited to the capital invested.”
--Related News :