Gold Prices Move Away From Highs Amid USD Buying Interest
Gold (XAU/USD) prices eased on the last day of the week and for now, seems to have snapped three consecutive days of gains to one-month highs, around the $2,724-$2,725 region touched on Thursday. The downtick was sponsored by the emergence of some dip-buying in the US Dollar (USD), which tends to undermine demand for the commodity. Further, a generally positive tone around equity markets, coupled with easing concerns about US President-elect Donald Trump’s disruptive trade tariffs and the Israel-Hamas ceasefire deal, weighed on the safe-haven precious metal.
Adding to this, growing acceptance that the Federal Reserve (Fed) will halt its interest rate-cutting cycle later this month and bets for a Bank of Japan (BOJ) rate hike next week exerted pressure on the non-yielding Gold prices. That said, expectations that lower inflation in the US will allow the Federal Reserve (Fed) to cut interest rates further this year, leading to a recent decline in US Treasury yields and the USD, should limit losses for XAU/USD. That said, XAU/USD remains on track to end in positive territory for the third consecutive week.
From a technical perspective, positive oscillators on the daily chart favour bullish traders and support prospects for additional gains. That said, it remains prudent to wait for sustained strength and acceptance above the $2,715-2,720 supply zone before placing fresh bullish bets. Gold prices might then climb to the $2,745 intermediate hurdle en-route the $2,760-2,762 area, before aiming to challenge the all-time tops, around the $2,790 region touched in October 2024.
On the flip side, any corrective slide now seems to find decent support near the $2,700-2,690 area. Any further declines could be seen as a buying opportunity and remain limited near the $2,662-2,660 region. The latter should act as a pivotal point, below which Gold prices could drop to the $2,635 zone en-route the $2,650 confluence point – comprising of 100-day Exponential Moving Average (EMA) and a short-term ascending trend-line extending from November swing lows. (AL)
Source: FXstreet
