Gold price climbs 4% YTD amid inflation concerns
Gold surges to $2,730, breaking $2,725 resistance as rally continues
Gold has been on an impressive upward trajectory in January 2025, making notable gains as it moves towards its all-time high.
The precious metal surged 1% during the Asian session on Tuesday, January 21st, from the key psychological level of $2,700 to $2,730, continuing its recent rally. This comes after a more muted price movement following US President Donald Trump's inauguration, where gold saw limited gains despite the event's global significance.
Gold's recent surge in the Asian session helped it break through the $2,725 resistance level, a threshold that had held prices back in previous weeks. By the time the European session began, gold was trading at around $2,729 with a year-to-date gain of 4%. The market sentiment surrounding gold has been supported by a weaker US dollar, which dropped to a 9-day low during Trump’s inauguration speech. The US dollar's decline followed the president’s remarks, signaling a shift away from his previous aggressive tariff policies. This pivot raised concerns about inflationary pressures while diminishing the likelihood of the Federal Reserve easing its policy stance in the near term.
Gold price outlook: Analyst project rise to all-time high
Analysts are eyeing the potential for further price gains, with the all-time high of $2,790 now within sight. Technical indicators suggest that gold's bullish trend is not yet exhausted.
Gold price dynamics (October 2024-January 2025). Source: TradingView.
Both the daily and 4-hour Relative Strength Index (RSI) remain in bullish territory, and the metal is not yet considered overbought, suggesting that further upside is possible in the short term. As traders position for continued strength in gold, the price levels of $2,700 and the previous resistance at $2,725 will serve as key support points.
Looking ahead, any additional weakness in the US dollar, or concerns over inflationary pressures, could further propel the yellow metal to new heights. Traders will also closely monitor the macroeconomic events impacting the Federal Reserve's monetary policy decisions, to assess the sustainability of gold’s upward momentum.
Gold dipped to $2,690 per ounce before recovering to $2,715, maintaining its December uptrend. The price rise was supported by speculation of potential Federal Reserve rate cuts.
