Gold Price Remains Confined In A Range Amid Mixed Cues; FOMC Minutes In Focus -

Gold Price Remains Confined In A Range Amid Mixed Cues; FOMC Minutes In Focus

Jan 07, 2025Jeremy ParkinsonFinance0

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Gold price struggles to attract buyers amid the Fed’s hawkish stance and elevated US bond yields.

Trade war fears and geopolitical risks lend support to the XAU/USD amid a modest USD downtick.

Investors look to the US macro data and FOMC meeting Minutes for some meaningful impetus.

Gold price (XAU/USD) oscillates in a range following the previous day’s late pullback from the $2,665 resistance zone as traders keenly await FOMC meeting Minutes. Apart from this, Wednesday’s release of the US ADP report on private-sector employment and the usual Weekly Initial Jobless Claims could provide some impetus. In the meantime, a further rise in the US Treasury bond yields, bolstered by the Federal Reserve’s (Fed) hawkish signal that it would slow the pace of rate cuts in 2025, acts as a headwind for the non-yielding yellow metal.The US Dollar (USD), however, struggles to attract any meaningful buyers and turns out to be a key factor lending support to the Gold price. Apart from this, the uncertainty surrounding US President-elect Donald Trump’s tariff plans, trade war fears, geopolitical tensions and a softer risk tone should help limit the downside for the safe-haven precious metal. This, in turn, warrants some caution before confirming that the recent move-up witnessed over the past two weeks or so has run its course and positioning for any meaningful depreciating move.

Gold price traders remain on the sidelines ahead of FOMC meeting Minutes

The US Treasury bond yields and the US Dollar jumped on Tuesday after strong US data reaffirmed market expectations that the Federal Reserve will slow the pace of its rate-cutting cycle this year.

The Institute for Supply Management reported that its Non-Manufacturing Purchasing Managers’ Index (PMI) rose to 54.1 in December and the Prices Paid component rose to a nearly two-year high.

Separately, the Job Openings and Labor Turnover Survey, or JOLTS report, showed that job openings unexpectedly increased to 8.098 million by the last day of November from the 7.839 million previous.

The data pointed to a still resilient US economy and support prospects for fewer Fed rate cuts in 2025, lifting the yield on the benchmark 10-year US government bond to its highest level since April.

Atlanta Fed President Raphael Bostic said that the central bank should be cautious with policy decisions amid the uneven progress on lowering inflation and err on the side of keeping rates elevated.

US President-elect Donald Trump denied a Washington Post story that his administration will pursue a less aggressive tariff regime and target certain sectors critical to US national or economic security.

Trump hinted at possible military intervention if Israeli captives held in Gaza are not released before he takes office, raising the risk of a further escalation of geopolitical tensions in the Middle East.

Traders now look to Wednesday’s US economic docket – featuring the release of the ADP report on private-sector employment and the usual Weekly Initial Jobless Claims – for short-term opportunities.

The focus, however, remains on FOMC meeting Minutes, which will play a key role in influencing the USD price dynamics and providing a fresh impetus to the Gold price later during the US session.

Gold price might continue to confront some barrier near the $2,665 region
From a technical perspective, the $2,665 horizontal zone now seems to have emerged as an immediate strong barrier. Given that oscillators on the daily chart have just started moving in positive territory, a sustained strength beyond the said barrier will be seen as a fresh trigger for bulls and pave the way for additional gains. The subsequent move up might then lift the Gold price to an intermediate resistance near the $2,681-2,683 zone en route to the $2,700 mark. On the flip side, weakness below the $2,635 area might continue to find some support near the weekly swing low, around the $2,615-2,614 region touched on Monday. This is followed by the $2,600 confluence, comprising the 100-day Exponential Moving Average (EMA) and a short-term ascending trend line extending from the November monthly trough. A convincing break below could expose the December swing low, around the $2,583 area, which if broken will shift the near-term bias in favor of bearish traders.More By This Author:Australian Dollar Changed Its Course Ahead Of Inflation Data, USD Recovers WTI Oscillates In A Range Below $73.00 Mark, Downside Potential Seems Limited EUR/USD Forecast: Euro recovery could pick up steam after German inflation data