Gold price climbs to 13-day high in early 2025 amid China stimulus plans
Gold price fluctuations
Gold has begun the year on a strong note, rising by 1.6% between January 2nd and the morning of January 3rd. The precious metal broke above key technical levels, setting the stage for continued momentum.
The recent rally pushed gold above its 50-day Exponential Moving Average (EMA) at $2,640 and the Fibonacci 50% retracement level, reaching a 13-day high at $2,666. The rally in gold also aligns with global economic concerns, particularly regarding China’s economic recovery. The People’s Bank of China (PBoC) is expected to implement an interest rate cut this year to support economic growth. Traders are watching for any developments in China that could influence global demand for gold. Furthermore, President Xi Jinping's reaffirmed commitment to proactive economic policies for 2025 suggests that China’s growth could help sustain investor interest in gold as a hedge against economic uncertainty.
Gold price dynamics (November 2024-January 2025). Source: TradingView
Gold price forecast: Focus on $2,640 support and Fibonacci golden ratioIn today's European session, gold is trading around $2,650, consolidating just above the 50-day EMA. A close eye will be on this level as a potential support point for further upward momentum. This break of key levels suggests that gold's near-term outlook remains bullish, especially as the metal continues to hold above the 50-day EMA, now offering support at $2,640. If the price continues to hold above this threshold, the next resistance could be found near the Fibonacci golden ratio of 0.618, a level which has historically provided strong price reactions.
In conclusion, gold’s price has begun the year strongly, testing key technical levels that suggest potential further gains. Hence, traders will need to watch for sustained support at $2,640 and resistance at the Fibonacci golden ratio to confirm whether this upward momentum can be maintained.
Gold prices surged by 27% in 2024 marking its best annual gain in a decade. Gold’s rise last year was driven by monetary easing, geopolitical tensions, and record central bank purchases.
