- Gold prices gain momentum for the fourth consecutive day on Friday, driven by safe-haven demand.
- A hawkish Fed stance, high US bond yields, and a strong USD are likely to limit further upside.
- Investors remain cautious, awaiting the release of the key US NFP report later today.
Gold price (XAU/USD) extends its upward momentum for the fourth consecutive day, reaching a fresh four-month high near the $2,680 mark during Friday’s European session. Safe-haven demand continues to bolster the precious metal amid persistent geopolitical tensions from the ongoing Russia-Ukraine conflict, Middle East unrest, trade war concerns, and a weakening risk sentiment.
The rally remains resilient despite expectations of slower Federal Reserve rate cuts, which keep US Treasury yields elevated and typically weigh on non-yielding assets like gold. Even the strength of the US Dollar (USD) has failed to cap the gains, signaling a bullish outlook for XAU/USD. Market participants now await the US Nonfarm Payrolls (NFP) report for further direction.
Gold Price Outlook: Bulls Defy Hawkish Fed and Geopolitical Uncertainty
- Gold Resilience: Gold price remains unfazed by hawkish Federal Reserve policies, elevated US bond yields, and a strong US Dollar.
- Geopolitical Tensions: President-elect Donald Trump is reportedly considering a national economic emergency to implement universal tariffs, increasing market uncertainty. Meanwhile, Ukraine launched an offensive in Kursk, Russia, while Israeli airstrikes targeted key Hamas commanders in Gaza.
- Fed’s Hawkish Stance: In December, the Federal Reserve projected only two rate cuts in 2025 due to persistent inflation. Officials, including Susan Collins, Patrick Harker, Jeffrey Schmid, and Michelle Bowman, emphasize a data-driven and cautious approach to monetary policy.
- Inflation Risks: Trump’s policies are expected to fuel inflation, potentially slowing the Fed’s pace of rate cuts, with US bond yields hovering near multi-month highs.
- NFP Report Focus: Traders await the US Nonfarm Payrolls (NFP) report, expected to show 160K new jobs in December, with the Unemployment Rate steady at 4.2%, for further market cues.
Gold Price Bulls Eye $2,700 as Momentum Strengthens
From a technical standpoint, this week’s breakout above the $2,665 horizontal resistance has triggered fresh buying interest among bullish traders. With daily chart oscillators gaining positive traction, Gold appears set to test the $2,681-$2,683 intermediate resistance before targeting the key $2,700 psychological level.
On the downside, any pullbacks toward the overnight low near $2,655 are likely to attract buying interest. Additional support is seen at the $2,635 region, followed by the weekly low around $2,615-$2,614, established on Monday. Stronger support lies near the $2,600 mark, which aligns with the 100-day Exponential Moving Average (EMA) and a short-term ascending trend line from November’s low. A decisive break below this level could shift the bias toward bearish traders.
