Gold Price Moves Away From One-Month Top Amid Renewed USD Buying Interest -

Gold Price Moves Away From One-Month Top Amid Renewed USD Buying Interest

Jan 17, 2025Jeremy ParkinsonFinance0

Gold price pulls back from a one-month high amid the emergence of some USD dip-buying.

Israel-Hamas ceasefire deal exerts additional pressure on the safe-haven XAU/USD pair.

Bets for additional rate cuts by the Fed should cap the buck and support the precious metal.

Gold price (XAU/USD) edges lower on the last day of the week and for now, seems to have snapped a three-day winning streak to a one-month peak, around the $2,724-2,725 region touched on Thursday. The downtick is sponsored by the emergence of some US Dollar (USD) dip-buying, which tends to undermine demand for the commodity. Furthermore, a generally positive tone around the equity markets, along with easing fears about US President-elect Donald Trump’s disruptive trade tariffs and Israel-Hamas ceasefire deal, weigh on the safe-haven precious metal. Apart from this, growing acceptance that the Federal Reserve (Fed) will pause its rate-cutting cycle later this month and bets for a Bank of Japan (BoJ) rate hike next week exerts pressure on the non-yielding Gold price. That said, expectations that softer inflation in the US will allow the Federal Reserve (Fed) to cut interest rates further this year, which led to the recent decline in the US Treasury bond yields and the USD, should limit losses for the XAU/USD. Nevertheless, the XAU/USD remains on track to end in positive territory for the third consecutive week.

Gold price is pressured by the emergence of some USD dip-buying; downside seems limited

US data released this week pointed to signs of abating inflation and fueled speculations that the Federal Reserve will cut rates twice this year, which, in turn, benefitted the non-yielding Gold price.

Adding to this, Fed Governor Christopher Waller said on Thursday that inflation is likely to continue to ease and three or four rate cuts are still possible this year if US economic data weakens further.

The outlook for the Fed’s rate cuts this year led to a further decline in the US Treasury bond yields and kept the US Dollar close to a one-week low, lending additional support to the XAU/USD.

Meanwhile, a report published by the US Commerce Department showed that Retail Sales increased 0.4% in December and the previous month’s reading was also revised higher to show a 0.8% gain.

Furthermore, the Philly Fed’s Manufacturing Index surpassed even the most optimistic estimates and surged to the highest level since April 2021, to 44.3 this month from a revised -10.9 in December.

Separately, the US Labor Department reported that Jobless Claims – a key indicator of the health of the U.S. labor market – rose from 203K previous to 217K during the week ending January 10.

The data reaffirmed expectations that the Fed will pause its rate cycle later this month amid worries that US President-elect Donald Trump’s policies will stoke inflation.

Israeli Prime Minister Benjamin Netanyahu announced on Friday that a ceasefire deal that would pause 15 months of war with Hamas and release hostages held in Gaza has been reached.

Friday’s US economic docket features the release of Building Permits, Housing Starts and Industrial Production figures, which might influence the USD and the precious metal.

Gold price technial setup favors bullish traders; $2,700 pivotal support holds the key
From a technical perspective, positive oscillators on the daily chart favor bullish traders and support prospects for additional gains. That said, it will still be prudent to wait for sustained strength and acceptance above the $2,715-2,720 supply zone before placing fresh bullish bets. The Gold price might then climb to the $2,745 intermediate hurdle en route to the $2,760-2,762 area, before aiming to challenge the all-time peak, around the $2,790 region touched in October 2024.On the flip side, any corrective pullback now seems to find decent support near the $2,700-2,690 area. A further decline could be seen as a buying opportunity and remain limited near the $2,662-2,660 region. The latter should act as a pivotal point, below which the Gold price could fall to the $2,635 zone en route to the $2,650 confluence – comprising the 100-day Exponential Moving Average (EMA) and a short-term ascending trend-line extending from the November swing low.

US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar. More By This Author:USD/CAD Climbs To 1.4385 Amid Sliding Oil Prices, Modest USD Strength Ahead Of US Data Japanese Yen Trims A Part Of Strong Intraday Gains; USD/JPY Bounces Off Multi-Week Low Australian Dollar Extends Gains, Upside Limited