Gold price (XAUUSD) marked a new ATH on Monday evening of $2956, as a weaker US dollar and falling Treasury yields drive demand for the precious metal. This increase comes in the wake of Germany’s federal election, where the Christian Democratic Union (CDU) took the lead, while the far-right Alternative for Germany (AfD) also made notable gains. The decline in the US dollar and softer bond yields have played a major role in supporting gold’s upward trend.
One of the key factors influencing gold prices is growing economic uncertainty. Recent data suggests a slowdown in the US economy, with weaker Services PMI readings and declining consumer confidence. As a result, investors are speculating that the Federal Reserve may cut interest rates, which could further fuel gold’s appeal. Additionally, geopolitical tensions are adding to market volatility. Disagreements among G7 nations over sanctions on Russia have heightened uncertainty, leading investors to seek safe-haven assets like gold.
Looking ahead, traders are closely watching the upcoming US GDP report for the fourth quarter of 2024. The data could shape expectations regarding future monetary policy decisions and influence gold prices further. Meanwhile, the mining industry is taking advantage of record-high gold prices. A prime example is Equinox Gold’s recent $5.4 billion acquisition of Calibre Mining, signaling increased mergers and acquisitions in the sector.
Despite economic headwinds, gold continues to be a preferred investment option due to its historical role as a hedge against inflation and financial instability. As global markets await key economic data releases, gold’s status as a safe-haven asset remains strong.
Technical Outlook:
The Gold Spot (XAU/USD) 4-hour chart is currently consolidating near the upper resistance zone of 2,955, forming an ascending wedge pattern. A decisive close above 2,955 is crucial for further upside momentum, potentially leading to a breakout towards 2,976 and 2,994 levels. However, if the price fails to sustain above this resistance, a pullback towards the trendline support near 2,920-2,930 is possible. The overall trend remains bullish, but confirmation above 2,955 will be key for the next leg higher.
Until then, Happy Trading!
Commodity Samachar Securities
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