17 Jan 2025

• Gold price treads water below the monthly high of $2,725 early Friday.  
• The US Dollar and Treasury bond yields sustain correction amid renewed dovish bets.
• Gold traders could cash in, repositioning for Trump’s inauguration on Monday.
• Technically, Gold price remains a ‘buy-the-dip’ trade, per the daily chart.
• Gold's price has paused its three-day uptrend to monthly highs of $2,725 as buyers catch a breather ahead of the weekend and US President-elect Donald Trump’s inaugural ceremony on Monday. 

• Gold price could pullback before the next leg up

  Gold prices have entered a phase of bullish consolidation, potentially facing a short-term correction before continuing their upward trajectory towards the all-time high of $2,790. The precious metal has not gained momentum from the stronger-than-anticipated Gross Domestic Product (GDP) growth in China for the fourth quarter (Q4) of 2024, which registered at 5.4% year-over-year, exceeding the 5% forecast and the prior figure of 4.6%. Additionally, data on Chinese Retail Sales and Industrial Production also exceeded expectations. As the leading consumer of gold globally, China's economic performance is particularly significant.

  The Chinese economy successfully met its 5% growth target in the last quarter of the previous week; however, this optimism is tempered by concerns regarding the property market in China and the potential tariffs proposed by US President-elect Trump.
  
  Nonetheless, the decline in Gold prices is being mitigated by strong expectations that the US Federal Reserve (Fed) will implement two interest rate cuts this year, following the subdued inflation data for December released earlier this week. The prevailing dovish sentiment regarding the Fed continues to apply downward pressure on US Treasury bond yields and the US Dollar (USD), thereby supporting the price of non-interest-bearing Gold.
  
  The mixed results from US Retail Sales and disappointing Initial Jobless Claims data released on Thursday have further fueled market expectations for Fed rate cuts. The Labor Department reported that Initial Claims for state unemployment benefits rose to a seasonally adjusted 217,000 for the week ending January 11, which was above the anticipated figure of 210,000.
  
  Additionally, comments from Fed Governor Christopher Waller have intensified the downward movement in US Treasury bond yields and the US Dollar. In an interview with CNBC on Thursday, Waller stated, “If price pressures continue on the current path of decelerating, it's reasonable to think rate cuts could possibly happen in the first half of the year.”
  
  For Gold traders, the upcoming mid-tier US housing data and Industrial Production figures will be significant, as they may offer new trading opportunities for Gold prices. Furthermore, the end-of-week market flows and profit-taking from recent long positions could pose additional challenges for the bullion market.

  Gold price technical analysis: Daily chart

  The short-term technical outlook for Gold price continues to favor of Gold buyers as the previous week’s symmetrical triangle breakout remains in play and the yellow metal holds well above all the major daily simple moving averages (SMA).

  The 14-day Relative Strength Index (RSI) has flattened above the midline, currently near 63.50, suggesting that Gold price could see a brief pullback before moving higher.

  Gold price eyes acceptance above the key static resistance at $2,726 to extend the uptrend toward the $2,750 psychological barrier. The next target is aligned at the record high of $2,790.

  If the correction unfolds, GOLD PRICE  will find initial demand at the previous day’s low of $2,690, below which the January 15 low of $2,670 will be tested.

  Deeper declines will challenge the powerful support area near $2,745, where the 21-day SMA, 50-day SMA, 100-SMA and the triangle convergence meet.