Gold is up slightly for the second day in a row, supported by geopolitical uncertainties and a moderate decline in the US dollar. However, the outlook remains mixed due to the Federal Reserve’s monetary policies and high bond yields.
Also read: Between geopolitical tensions and expectations of the Fed Minutes, gold is at great risk!
A cautious climb below key resistances
The price of gold (XAU/USD) increased slightly in the European session this Wednesday, while remaining below the resistance zone of 2 665 $ reached the day before. Several factors support this increase: concerns related to the tariff policies of President-elect Donald Trump, tensions in the Middle East and a general tone of caution in the financial markets. Gold, the safe haven par excellence, benefits from these uncertainties.
Despite this, the Fed’s restrictive monetary policy, which is keeping US bond yields near recent highs, is dampening gold’s bullish ambitions. This situation is aggravated by renewed purchases of US dollars, which further limit the precious metal’s gains.
Expectations around the Fed Minutes
Markets remain attentive to several economic indicators expected this Wednesday, including the ADP report on private employment and new weekly jobless claims in the United States. However, the main focus is on the FOMC Meeting Minutes, scheduled for later in the day. The latter should enlighten investors on the likely evolution of interest rates and directly influence the movements of gold.
On Tuesday, US bond yields and the dollar jumped after the release of strong economic data. The ISM non-manufacturing PMI index reached 54,1 in December, and its prices paid subindex climbed to a nearly two-year high. At the same time, the JOLTS report revealed an unexpected increase in job vacancies 8,098 millionstestifying to the resilience of the American economy.
This data reinforces the idea that the Fed could slow down its rate reduction in 2025, a scenario which favors bond yields but limits the attractiveness of gold, an asset without yield.
-A geopolitical context under high tension
On the political front, Donald Trump has denied rumors that his administration is considering a softer approach to tariffs. He also hinted at possible military intervention if Israeli hostages in Gaza are not released before he takes office. This statement increases the risks of escalation in the Middle East, which could support demand for gold as a safe haven.
Technical analysis: resistance at $2,665
From a technical point of view, the area of 2 665 $ represents a significant barrier. Oscillators on the daily chart are starting to indicate a positive bias, and a break above this level could open the way to the next resistance between 2 681 $ et 2 683 $with a goal to 2 700 $.
Conversely, a fall below 2 635 $ could bring the price back towards the weekly support located around 2 615 $. A clear break below this zone would expose gold to lower levels, notably the December low at 2 583 $.
The role of the Fed Minutes in gold dynamics
The Fed Minutes, released three weeks after each FOMC meeting, provide a detailed overview of upcoming monetary policy. These documents strongly influence investor expectations, particularly on interest rates, which directly impacts the price of gold.
An optimistic tone in the Minutes could strengthen the dollar and weaken gold, while a more cautious stance from the Fed could support the precious metal. The verdict of these Minutes will be a key moment for the markets this Wednesday.
Related News :