Gold price modest 2% January gain faces resistance ahead of NFP reports
Since January 1st, gold has managed a modest 2% increase,
Gold has continued its upward trajectory since its December lows, extending its gains into January with a mild uptrend. The price recently rose above the 0.618 Fibonacci retracement level at $2,670 per ounce and is now trading near $2,680 as of January 10th.
However, the precious metal's advance is not without challenges, as key resistance levels and broader market dynamics pose hurdles.
Gold price dynamics (December 2024-January 2025). Source: TradingView.
Geopolitical uncertainties and concerns surrounding US President-elect Donald Trump's proposed tariffs continue to weigh on market sentiment, bolstering gold’s appeal as a safe-haven asset. Additionally, expectations of higher inflation due to potential expansionary fiscal policies lend further support to gold's role as a hedge against rising prices.
Gold price prediction: $2,750 in sight despite strong US dollar headwinds
Since January 1st, gold has managed a modest 2% increase, reflecting cautious upward momentum. The next significant price hurdle lies at the 0.786 Fibonacci retracement level, suggesting that bulls may face a test of strength in the near term. Gold price outlook is also tempered by the Federal Reserve's slower pace of interest rate cuts, which has contributed to elevated US Treasury bond yields and a firm US Dollar near a two-year high. These factors present headwinds for gold, as higher yields and a stronger dollar reduce the appeal of the non-yielding metal.
However, the Relative Strength Index (RSI) on both the 4-hour and daily charts remains above the 50 mark, indicating potential for further price movement toward the December 2024 high of $2,750 per ounce. The market is also keeping an eye on the upcoming US Nonfarm Payrolls (NFP) report, which could introduce further volatility into the market. Despite these mixed signals, gold remains poised for its second consecutive weekly gain, highlighting persistent buying interest even as challenges mount.
The Fed's December minutes, hinted at a slower pace of interest rate cuts, drove gold's price surge despite a stronger US dollar. Gold reached a three-week high of $2,670 on January 8th, a higher highs since mid-December.
