30 Jan 2025

• Gold price gains positive traction and climbs to a fresh weekly top on Thursday. 
• Sliding US bond yields keep the USD bulls on the defensive and lend support.
• The Fed’s hawkish pause and a positive risk tone might cap the XAU/USD pair.
• Gold prices (XAU/USD) continue their steady upward trajectory, reaching a new weekly high in the vicinity of $2,773-2,774 during the early part of the European session on Thursday. In spite of the Federal Reserve's (Fed) hawkish stance during its recent meeting, uncertainty surrounding the policies of US President Donald Trump has led to a decline in US Treasury bond yields. This situation places the US Dollar (USD) bulls in a vulnerable position, thereby directing investment towards the non-yielding asset of gold.
  
  Additionally, ongoing concerns regarding the potential economic repercussions of Trump's trade tariffs serve as another factor supporting the safe-haven appeal of gold. Meanwhile, the Fed has signaled no immediate intentions to cut interest rates, which appears to provide some support for the US Dollar (USD). Furthermore, a generally optimistic risk sentiment may deter traders from making new bullish investments in XAU/USD ahead of the Advance US Q4 GDP report scheduled for later on Thursday.

• Gold price builds on intraday move up amid declining US bond yields

• The Federal Reserve decided to maintain interest rates on Wednesday, indicating that there would be no immediate inclination to reduce borrowing costs until inflation and employment data warrant such a move.
  
  During the press conference following the meeting, Fed Chair Jerome Powell emphasized that political factors would not influence the central bank's decisions regarding interest rates and minimized expectations for forthcoming rate reductions.
  
  Powell's statements reinforced the idea that interest rates are likely to remain elevated for an extended period, particularly in light of concerns regarding US President Donald Trump's protectionist measures, which could potentially trigger renewed inflation.
  
  The yield on the benchmark 10-year US government bond has struggled to gain momentum following a rebound from a one-month low, which has limited the strength of the US Dollar while providing support for Gold prices.
  
  Investor apprehension regarding the possible economic repercussions of Trump's trade tariffs and protectionist strategies continues to bolster demand for the safe-haven precious metal.
  
  The eagerly awaited monetary policy decision from the European Central Bank (ECB) on Thursday may introduce some market volatility and increase interest in the XAU/USD.
  
  Attention will subsequently turn to the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday, which is the Federal Reserve's preferred measure of inflation.

• Gold price remains on track to retest multi-month peak, around $2,786

• From a technical standpoint, the recent breach of the $2,720-2,725 horizontal resistance, coupled with favorable oscillators on the daily chart, supports a positive short-term outlook for Gold prices. However, it remains wise to await further strength beyond the immediate resistance at $2,772-2,773 before considering a move towards the $2,786 level, which represents the highest point since October 2024 reached last Friday. Should momentum continue, it may extend towards the all-time high near the $2,790 region. A subsequent increase that surpasses the $2,800 threshold would be regarded as a new catalyst for bullish sentiment, facilitating the continuation of the established upward trend observed over the past month.
  
  Conversely, a decline below the recent swing low around the $2,745-2,744 range could present a buying opportunity, albeit limited near the $2,730 level, which corresponds to the weekly low recorded on Monday. This is followed by the $2,725-2,750 zone, which has transitioned from resistance to support. Should the Gold price fall below this level, it may accelerate its decline towards the $2,707-2,705 area, ultimately targeting the $2,684 support zone.