Gold price propels to new high amid U.S. dollar strength and Fed hawkish stance
Gold’s uptrend continues despite Fed's hawkish signals
Gold is riding an uptrend with higher highs and higher lows since mid-December, holding steady despite the US dollar’s strength.
After reaching a fresh three-week high at $2,670 on January 8th, gold remains poised for further movement, benefiting from geopolitical risks and the evolving Federal Reserve stance.
On January 8th, gold made another notable move, rising to $2,670, despite the US dollar showing gains. This price surge was driven by the Fed minutes from the December meeting, which pointed towards a slowdown in the pace of interest rate cuts. The Fed’s neutral-to-slightly hawkish tone has bolstered the gold market, even as the dollar climbed higher. Additionally, market concerns grew following a CNN report revealing that US President-elect Donald Trump might consider declaring a national economic emergency to impose tariffs. This uncertainty has fueled safe-haven demand, keeping gold supported despite other headwinds.
Gold price outlook: Strong support at $2,650 as RSI suggest further upside
Gold’s price rise to a new high around $2,670 met with key technical resistance at the Fibonacci golden ratio level. As of January 9th, in the European session, gold is seeing relatively thin volatility, hovering between $2,670 and the Fibonacci 50% level at $2,650, with only a slight volatility of 0.65%. The RSI on both the 4-hour and daily charts is above the 50 level, which suggests potential for further upside momentum if the market remains in risk-off mode.
Gold price dynamics (December 2024-January 2025). Source: TradingView.
Geopolitical risks and concerns about Trump’s tariff plans continue to weigh on investor sentiment. This persistent uncertainty has reinforced gold’s position as a safe-haven asset. A slight pullback in US Treasury bond yields has added to the bearish pressure on the dollar, validating the positive outlook for XAU/USD. Traders are now looking to speeches from key FOMC members for further clues, particularly with the upcoming US Nonfarm Payrolls (NFP) report on Friday, which could offer fresh catalysts for gold.
Gold prices continue to test key resistance levels, reaching $2,665 per ounce on January 7. Despite the strong uptrend, US economic data and political remarks are weighing on further gains for the precious metal.
