Gold price soars amid geopolitical tensions, Fed policy eyed

Fonte Fxstreet
  • Gold price delivers strong upside move as geopolitical tensions deepen.
  • Fed policy, labor market and Manufacturing PMI data for December will remain in the spotlight.
  • The Fed is expected to keep interest rates unchanged for the fourth straight time.

Gold price (XAG/USD) remains upbeat as mounting geopolitical tensions have improved the appeal of bullion. The precious metal attracts significant bids as the drone attack on US bases near northeastern Jordan has impacted market sentiment. In addition, a moderate increase in the U S Core Personal Consumption Expenditures (PCE) data for December has softened the inflation outlook.

This week, investors should brace for a high volatile action as the interest rate decision by the Federal Reserve (Fed) will be followed by the Institute of Supply Management (ISM) Manufacturing PMI and Nonfarm Payrolls (NFP) report for December. The Fed is widely anticipated to keep interest rates steady in the 5.25-5.50% range but fresh guidance on interest rates will be keenly watched. Investors would look for cues of whether Fed policymakers continue leaning towards keeping interest rates restrictive till June or are likely to signal a dovish decision for March or May. 

Daily Digest Market Movers: Gold price rallies on Middle East crisis 

  • Gold price discovers strong buying interest on Monday as investors rush for safe-haven assets due to deepening Middle East tensions.
  • The precious metal witnesses significant bets as geopolitical tensions mount after a drone attack on US service members stationed in northeastern Jordan.
  • Meanwhile, continued attacks on energy shipments in the Red Sea by Iran-backed-Houthis have disrupted the global supply chain.
  • This week, market participants will focus on the Federal Reserve’s first monetary policy announcement of 2024, which is scheduled for Wednesday.
  • As per the CME FedWatch Tool, investors are pretty confident that interest rates will remain unchanged in the range of 5.25-5.50% for the fourth straight time.
  • While major focus will be on the interest rate outlook. Traders see a higher probability of the Fed reducing interest rates from May as policymakers have been reiterating the need for maintaining restrictive interest rates for a longer period until they get convinced that inflation would come down to the 2% target in a timely manner.
  • The US Dollar Index (DXY) could come under pressure if the Fed signals that it could commence its rate-cutting campaign from March. 
  • A soft core PCE price index report for December, released on Friday, failed to uplift expectations of a rate-cut from March.
  • Monthly core PCE grew by 0.2% as expected while annual underlying inflation data decelerated to 2.9% against expectations of 3.0% and the former reading of 3.2%.
  • Apart from the Fed policy, it will be a volatile week as Manufacturing PMI, and ADP and official Employment data have lined-up for release.
  • But first, market participants will look for the US JOLTS Job Openings data, which will be published on Tuesday. This will indicate how strong the labor demand is despite interest rates remaining elevated.
  • Investors have anticipated that US employers posted fresh 8.75M jobs in December against 8.79M in November.

Technical Analysis: Gold price climbs to near $2,030

Gold price approaches the horizontal resistance of the Ascending Triangle chart pattern plotted from January 19 high at $2,039.50, on the two-hour timeframe. The upward-sloping border of the aforementioned pattern is plotted from the January 17 low near $2,002. The pattern has a bullish bias, suggesting a breakout higher will follow its completion. 

On a daily time frame, the precious metal continues to put efforts for sustainability above the 20-day Exponential Moving Average (EMA), which trades around $2,030.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Isenção de responsabilidade: Apenas para fins informativos. O desempenho passado não é indicativo de resultados futuros.
placeholder
Lucro da Tesla no 2º trimestre cai mais de 14%, Musk apoia investidores de varejo: eles são perspicazesTradingKey - A fabricante global de veículos elétricos Tesla ( TSLA) está enfrentando sua semana mais difícil desde 2026. Afetada por uma forte queda na margem operacional e pelo fluxo de caixa livre
Autor  TradingKey
11 horas atrás
TradingKey - A fabricante global de veículos elétricos Tesla ( TSLA) está enfrentando sua semana mais difícil desde 2026. Afetada por uma forte queda na margem operacional e pelo fluxo de caixa livre
placeholder
Previsão do Preço do Petróleo Bruto: Tensões no Oriente Médio Impulsionam Preços do Petróleo, Eles Ainda Podem Subir Após Romperem US$ 100?TradingKey - Afetado pela contínua escalada das tensões geopolíticas no Oriente Médio, o petróleo Brent ( UKOIL) voltou a superar a barreira psicológica de US$ 100 por barril após dois meses, à medida
Autor  TradingKey
11 horas atrás
TradingKey - Afetado pela contínua escalada das tensões geopolíticas no Oriente Médio, o petróleo Brent ( UKOIL) voltou a superar a barreira psicológica de US$ 100 por barril após dois meses, à medida
placeholder
Ouro aprofunda queda com temores de inflação elevando apostas em alta de juros do Fed e fortalecendo o dólar diante das tarifas de TrumpO ouro (XAU/USD) atrai vendedores pelo segundo dia consecutivo nesta sexta-feira e acentua as perdas abaixo do nível de US$ 4.050 durante a sessão asiática.
Autor  FXStreet
15 horas atrás
O ouro (XAU/USD) atrai vendedores pelo segundo dia consecutivo nesta sexta-feira e acentua as perdas abaixo do nível de US$ 4.050 durante a sessão asiática.
placeholder
A receita do Google Cloud saltou 82%, para US$ 24,8 bilhões, enquanto a Alphabet defende seus investimentos em IAA receita do Google Cloud, da Alphabet, aumentou 82% em relação ao ano anterior, atingindo US$ 24,8 bilhões no segundo trimestre fiscal.
Autor  Cryptopolitan
19 horas atrás
A receita do Google Cloud, da Alphabet, aumentou 82% em relação ao ano anterior, atingindo US$ 24,8 bilhões no segundo trimestre fiscal.
placeholder
Os gastos das grandes empresas de tecnologia com IA devem superar a geração cash até 2027Prevê-se que as cinco maiores empresas de computação em nuvem dos Estados Unidos gastarão mais na criação de infraestrutura de IA do que arrecadarão em receita até 2027. Relatórios sugerem que os acionistas estão começando a se perguntar quando o cash em IA começará a dar retorno. Com bilhões sendo investidos em novos data centers, os investidores estão cada vez menos entusiasmados...
Autor  Cryptopolitan
19 horas atrás
Prevê-se que as cinco maiores empresas de computação em nuvem dos Estados Unidos gastarão mais na criação de infraestrutura de IA do que arrecadarão em receita até 2027. Relatórios sugerem que os acionistas estão começando a se perguntar quando o cash em IA começará a dar retorno. Com bilhões sendo investidos em novos data centers, os investidores estão cada vez menos entusiasmados...
Produtos relacionados
goTop
quote