Softer Dollar Helps Gold
Gold prices are turning higher again today, helped by a weaker US Dollar on the back of yesterday’s FOMC meeting. The Fed held rates steady as expected and initially sounded more hawkish in its statement. However, throughout the post-meeting press conference, chairman Powell’s comments were seen leaning more on the dovish side. Traders are now pricing in at least two cuts this year, currently pegged for June and December, with the potential for these projections to be brought forward on any downside US data surprises.
Bullish Outlook
Against this backdrop, gold prices look poised to continue higher near-term with traders looking for a breakout to fresh highs. Uncertainty ahead of planned tariffs from Trump, and increasingly aggressive rhetoric from Trump on trade and other issues, means that safe-haven demand for gold is likely to remain a key theme across Q1. Alongside this, traders will be watching incoming US data with USD likely to weaken in response to any data undershoots as traders bring rate-cut expectations forward. On the other hand, any upside surprises in data should keep near-term rate cut expectations muted, helping drive USD higher while capping upside in gold.
Technical Views
Gold
Gold prices are once again testing the 2.789.40 level highs. With momentum studies bullish, focus is on a breakout higher. Only a move below the 2,718.88 level will alter the near-term bull view, with 2,604.56 the deeper support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.