Tag: XAUUSD

• Gold drops over 1% Friday as USD strengthens, hitting 10-day high at 107.66.
• XAU/USD falls to $2,845 as Fed rate-cut bets rise
• Trump confirms 25% tariffs on Mexico and Canada, fueling market uncertainty.
• Fed expected to cut rates by 70 bps in 2025 with first cut projected for June.

Gold extended its losses on Friday, down more than 1% and over 3% in the week. The US Dollar rose to a ten-day peak of 107.66 amid fears of trade policies in the United States (US) and data that has sparked recessionary worries. The XAU/USD trades at $2,845 after reaching a daily peak of $2,885.

According to US President Donald Trump, 25% tariffs on Mexican and Canadian products will be applied next week on March 4. The release of the Federal Reserve’s (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, hinted that inflation continued progressing toward the 2% Fed goal.

Expectations that the Fed would continue to ease policy rose after the data. According to Prime Market Terminal, the Fed will lower interest rates by 70 basis points this year with investors projecting the first rate cut in June.

The Atlanta Fed GDPNow estimate has also been updated for Q1 2025. The model shows the economy will contract from a 2.3% expansion to -1.5 %. After the data, the 10-year US Treasury note yield dropped three basis points, and the US Dollar (USD) advanced on recession woes.

In the meantime, some Fed speakers crossed the wires. The Cleveland Fed’s Beth Hammack said that a rate hike is not in the cards, and the impact of trade policies on monetary policy and the economy remains uncertain.

Daily digest market movers: Gold price treads water as US recession looms

• The core PCE in the US rose 0.3% MoM from December and increased 2.6% YoY, as estimated, down from December’s 2.8% increase.
• The headline PCE jumped by 2.5% YoY as expected, dipping from 2.6%, and remained unchanged every month at 0.3%, as projected.
• Meanwhile, traders continued to digest US President Donald Trump’s tariff rhetoric. He said 25% tariffs on Mexico and Canada would start next week, alongside an additional 10% on China.
• The US 10-year Treasury note yield is at 4.229%, capping the Bullion price decline. US real yields, as measured by the yield in the US 10-year Treasury Inflation-Protected Securities (TIPS), edge lower five bps to 1.853%.
• Last week, Goldman Sachs revised Gold price projections to $3,100 by the end of 2025.

XAU/USD technical outlook: Gold extends losses beneath $2,850

Gold price registers back-to-back bearish candles, a sign that traders are booking profits ahead of the weekend and squaring their portfolios at the end of the month. Once XAU/USD dropped below $2,900, it extended its fall toward $2,832, but a daily close above 2,850 would keep buyers hopeful for higher prices.

In that outcome, XAU/USD first resistance would be the $2,900 mark, ahead of the year-to-date (YTD) high of $2,956. Otherwise, Gold’s first support would be $2,800, followed by the October 31 daily peak at $2,790 and by the 50-day Simple Moving Average (SMA) at $2,770.

• Gold touches all-time high of $2,954 amid trade policy uncertainty.
• Trump expands tariffs to lumber and soft commodities, adding market jitters.
• US data mixed: Manufacturing PMI improves, but Services PMI contracts.

Gold price slides late on Friday, poised to end the week positively, accumulating eight straight weeks of gains that pushed the yellow metal to all-time highs of $2,954. At the time of writing, the XAU/USD trades at $2,940, down 0.15%.

The financial markets’ narrative has not changed as US President Donald Trump continues with rhetoric related to tariffs. In addition to imposing 25% tariffs on cars, pharmaceuticals and chips, Trump broadened duties to lumber and other soft commodities.

This fueled the rally in Bullion prices as investors seeking safety drove prices higher amidst uncertainty about US trade policies. Meanwhile, geopolitics took a second stage as there was some progress in the discussion to end the Russia-Ukraine war, which relieved the markets.

Data-wise, business activity in the United States was mixed. The manufacturing PMI improved. Conversely, the Services PMI plunged for the first time since January 2023.

Other data showed that Existing Home Sales plunged, and the University of Michigan (UoM) Consumer Sentiment Final reading for February deteriorated further.

Daily digest market movers: Gold price fails to capitalize on US yields drop

• The US 10-year Treasury bond yield falls nine basis points (bps) and yields 4.416%.

• US real yields, which correlate inversely to Bullion prices, drop four basis points to 1.996%, a tailwind for Bullion prices.
• US S&P Global revealed the Manufacturing PMI in February expanded by 51.6, up from 51.2, exceeding forecasts. The Services PMI plummeted from 52.9 to 49.7.
• The University of Michigan Consumer Sentiment Index in February dipped from 71.1 to 64.7. American consumers’ inflation expectations for one year rose from 3.3% to 4.3% as foreseen, and for a five-year period, they are anchored at 3.5%, up from 3.2% revealed in the previous month.
• The Federal Reserve’s Meeting Minutes from Wednesday revealed that Trump’s trade and immigration policies fueled concerns over rising prices.
• The World Gold Council revealed that central bank purchases rose more than 54% YoY to 333 tonnes following Trump’s victory.
• Money market fed funds futures are pricing in 50 basis points of easing by the Fed in 2025.

XAU/USD technical outlook: Gold price faces resistance and retreats

Gold price remains upwardly biased, yet the trend seems exhausted. The Relative Strength Index (RSI) suggests that buyers are losing ground with the RSI’s exiting from overbought territory opening the door for a retracement in Bullion prices.

The first key support area to look at is $2,900. Once surpassed, sellers would target the February 14 swing low of $2,877, followed by the February 12 daily low of $2,864. Conversely, if XAU/USD rises past $2,954, the first resistance would be the psychological $2,950, followed by $3,000.

• Gold slightly down in late trading, still up 0.40% for the week amid geopolitical tensions.
• Mixed US economic data; higher Housing Starts, lower Building Permits minimally impact Bullion.
• Fed Governor Waller’s dovish comments suggest potential for early rate cuts.

Gold’s price dropped late in the North American session, but it is set to finish the week with gains of over 0.40% as market players await the inauguration of US President-elect Donald Trump. Although the XAU/USD trades at $2,701, down 0.44%, investors continued to buy the golden metal due to political uncertainty.

The precious metal continues to be driven by geopolitics and politics in the United States (US). Although US Treasury bond yields in the belly of the curve remained unchanged, Bullion buyers failed to push prices higher to book additional gains ahead of the weekend.

The US economic schedule showed that Housing Starts jumped double digits, though Building Permits contracted in December. Gold barely reacted to the news, as most of the data revealed during the week, led by Retail Sales featured on Thursday, suggest the economy is solid.

The US Dollar Index (DXY), which tracks the USD’s performance against a basket of six peers, surged 0.35% to 109.34.

Other data revealed during the Asian session showed that China’s economy hit a 5% Gross Domestic Product (GDP) growth rate in 2024, according to the National Bureau of Statistics.

On Thursday, Fed Governor Christopher Waller tilted dovish and commented that the US central bank could lower borrowing costs sooner and faster if the disinflation process evolves.

Market participants are pricing in near-even odds that the Fed will cut rates twice by the end of 2025 and see the first reduction in June.

Source: Prime Market Terminal

Next week, the US economic docket will feature the US Presidential Inauguration, the release of Initial Jobless Claims and Flash PMIs data.

Daily digest market movers: Gold price pressured ahead of the weekend

• Gold fell as real yields remained firm on Friday. Measured by the 10-year Treasury Inflation-Protected Securities (TIPS) yield, was virtually unchanged at 2.18%.
• The US 10-year Treasury bond yield was unchanged at 4.618%, a headwind for the golden metal.
• US Housing Starts jumped from 1.294 million to 1.499 million in December, a jump of 15.8% MoM.
• Building Permits for the same period shrank as permits dipped from 1.493 million to 1.483 million, a 0.7% drop.
• The latest inflation data and Fed Waller’s comments pressured the US Dollar, as traders had grown confident the Fed would cut rates sooner rather than later. Waller didn’t rule out a cut in the March meeting as inflation “is getting close to what our 2% inflation target would be.”

XAU/USD technical outlook: Gold hold firm near $2,700

Gold prices fell amid the lack of catalysts ahead of the weekend. Nonetheless, buyers must keep XAU/USD’s prices above $2,700, so they can remain hopeful of pushing the yellow metal toward the December 12 high of $2,726. Once surpassed, the next stop would be $2,750, followed by the all-time high at $2,790.

On the other hand, buyers’ failure to achieve the previously mentioned outcome could mean Gold might test the January 13 swing low of $2,656, followed by the confluence of the 50 and 100-day Simple Moving Averages (SMAs) at $2,639 – $2,642.

• Gold rebounds 0.69% despite significant US job additions, challenging Fed’s rate cut path.
• Gold recovers from post-labor report drop as investors weigh Fed’s cautious disinflation stance.
• Upcoming US inflation and retail sales data set to influence gold’s trajectory, Fed policy.

Gold price rebounded off daily lows on Friday, extending its rally for the fourth consecutive day as traders shrugged off a strong United States (US) Nonfarm Payrolls report. This tempered the Federal Reserve’s (Fed) concerns about the labor market, but not so much inflation as some officials acknowledged. The XAU/USD trades at $2,687, up 0.69%.

Bullion fell sharply after the US Bureau of Labor Statistics (BLS) revealed that the economy added an outstanding number of people to the workforce, topping 200K. As a consequence, the Unemployment Rate dipped, while investors priced in fewer interest rate cuts based on the fact that the economy continues to create enough jobs, while the disinflation process “halted,” according to the Fed’s latest minutes.

Nevertheless, XAU/USD recovered once market participants digested the data. The data reassured Fed officials that the labor market remains healthy while they tackle inflation, which recently edged higher after the US central bank lowered rates by 100 basis points in 2024.

The US Dollar rose sharply to multi-month highs according to the US Dollar Index (DXY). The DXY hit 109.96 before trimming gains and is at 109.68, up 0.49%. US Treasury bond yields soared, yet had stabilized, particularly the belly of the curve.

Chicago Fed President Austan Goolsbee said they don’t complain because the economy has created over 250K jobs. He added that the jobs market seems stable “at full employment,” adding that if conditions are stable and there’s no rise in inflation, “rates should go down.”

Given the backdrop, investor focus will shift to next week’s data. The US schedule will feature inflation figures on the producer and consumer side, alongside Retail Sales and jobless claims for the week ending January 11.

Daily digest market movers: Gold price surges accompanied by the US Dollar

• Gold price shrugs off higher US real yields, which rose by two bps to 2.30%. At the same time, the US 10-year T-note yield soared seven and a half bps to 4.767%.
• The US Bureau of Labor Statistics (BLS) revealed that the economy created 256K jobs last month, although November was revised downward from 227K to 212K. The consensus projected 160K people to be added to the workforce, with private hiring totaling 223K.
• The Unemployment Rate fell to 4.1%, while Average Hourly Earnings (AHE) dipped from 4% to 3.9%. Following the data release, traders expect the Federal Reserve to cut rates just once in 2025.
• Easing expectations of the Federal Reserve continued to edge lower. The December Fed funds futures contract is pricing in 30 basis points of easing.
• US Consumer Sentiment in January announced by the University of Michigan (UoM) missed estimates of 73.8 and was down to 73.2. Inflation expectations for one year rose by 3.3% up from 2.8% and for a five-year period increased from 3% to 3.3%.
• On Thursday, Fed Governor Michelle Bowman maintained a hawkish stance, saying the central bank should be cautious in adjusting interest rates, while Kansas City Fed Jeffrey Schmid added that rates are “near” neutral.
• Earlier, Philadelphia Fed Patrick Harker revealed that the US central bank could pause amid uncertainty, while Boston Fed Susan Collins said the current outlook suggests a gradual approach to rate cuts.

XAU/USD technical outlook: Gold price soars above $2,650 as bulls stepped in

Gold’s uptrend remains in place as the yellow metal has carved successive series of higher highs and higher lows, with traders eyeing the $2,700 mark. Momentum is strongly tilted to the upside as seen on the Relative Strength Index (RSI) indicator, which shows bulls are in charge.

If XAU/USD clears $2,700, the next resistance would be the December 12 high of $2,726 and the all-time high (ATH) at $2,790.

Conversely, a drop below $2,650 will put into play a challenge of the 50 and 100-day Simple Moving Averages (SMAs) at $2,645 and $2,632 respectively. On further weakness, $2,600 is up next, ahead of the 200-day SMA at $2,503.