13 Jan 2025

• Gold price treads water below $2,700 as the US inflation week sets in.
• Trump’s policy uncertainty outweighs strong US NFP-led hawkish Fed bets.
• Gold buyers remain defiant amid a symmetrical triangle breakout, but profit-taking could seep in.
• Gold price pauses its four-day uptrend, treading water below $2,700 in Asian trading on Monday. Gold buyers seem to face exhaustion following a relentless rise in the previous week

• Gold price stalls but upside remains intact

• The US Dollar (USD) has entered a phase of bullish consolidation, coinciding with the rise in US Treasury bond yields, which has resulted in Gold prices fluctuating within a narrow range beneath the monthly peak of $2,698 established on Friday.
  
  China's initiatives to stabilize the Yuan and bolster economic growth provide support for the non-yielding Gold, effectively limiting its downward movements. Additionally, market participants remain cautious regarding the potential trade policies of US President-elect Donald Trump and their implications for inflation and the broader economy, thereby enhancing the safe-haven attractiveness of Gold.
  
  Moreover, the recent increase in WTI oil prices contributes to inflationary concerns in the anticipated Trump administration, further supporting Gold as an inflation hedge. Oil prices surged on Friday following the US Treasury's imposition of broader sanctions on Russian oil supplies, which are expected to impact Russian crude exports to major consumers such as China and India.
  
  Looking ahead, it remains uncertain whether Gold prices will continue their upward trajectory, as traders may engage in profit-taking on their long positions in anticipation of Wednesday's US Consumer Price Index (CPI) data release. This data has gained significance following Friday's impressive Nonfarm Payrolls (NFP) report, which has heightened expectations for a single interest rate hike by the US Federal Reserve (Fed) this year.
  
  The Labor Department's NFP report indicated that the US economy added 256,000 jobs in December, surpassing November's 227,000 job gains and the anticipated figure of 160,000. The Unemployment Rate unexpectedly declined to 4.1%, compared to the expected steady rate of 4.2%.
  
  According to Refinitiv’s US Dollar Interest Rate Probabilities, market expectations for Fed rate cuts have been reduced to just 27 basis points (bps) for the entirety of 2025, with the terminal rate now projected at around 4.0%, in contrast to the 3.0% many anticipated at this time last year.
  
  Additionally, traders will keep a close watch on the demand for physical Gold in India and China for new trading signals. Reports from Reuters indicate that Gold discounts

• Gold price technical analysis: Daily chart

• The daily chart shows that despite a Bear Cross in play, Gold buyers remained defiant and flexed their muscles on Friday, extending the symmetrical triangle breakout.

  Gold price confirmed an upside break from a month-long symmetrical triangle pattern on January 8, adding credence to the ongoing bullish momentum. Meanwhile, the 21-day Simple Moving Average (SMA) crossed the 100-day SMA from above on a daily closing basis on Thursday, validiting the Bear Cross.

  The 14-day Relative Strength Index (RSI) holds comfortably above the midline, currently near 60.00, backing the case for more upside in Gold price.

  Gold price could extend its four-day advance to take out the $2,700 barrier should buyers regain poise.  

  The next upside barriers are aligned at the $2,710 round level and the December 12 high of $2,726.

  Conversely, strong support is around $2,645, where the 50-day SMA coincides with the triangle resistance.

  If that cap is cracked, Gold price will find immediate respite at $2,635, the confluence of the 21-day SMA, the 100-day SMA and the triangle support.

  The last line of defense for Gold buyers is seen at the January 6 low of $2,615.