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MENAFN- Daily Forex)
- For the second consecutive trading session, gold prices are moving higher with gains extending to the resistance level of $2684 per ounce, which is stable around it at the time of writing the analysis.
- This is amid cautious anticipation of the gold bullion market until the announcement of US inflation figures, which will strongly and directly affect the future of the US Federal Reserve's policies under the leadership of Trump, who will be inaugurated next week as President of the United States of America with an agenda that usually stimulates higher US inflation rates.
Future of US Monetary Policy Under Trump
Furthermore, global financial markets and the global economy are preparing for a second term for Trump next week. As in the previous period, Trump intends to follow his pro-inflationary economic policies, which have increased due to threats of tariffs, which may strengthen the argument in Favor of tightening the US Federal Reserve's policies. High borrowing costs increase the alternative cost of holding non-interest-bearing gold bullion, which puts pressure on demand for gold. In addition, high energy service costs in Europe have weakened the argument in favour of cutting interest rates by the European Central Bank Dollar Index Pauses Gains
According to Forex trading, the US Dollar Index DXY , which measures the performance of the US currency against a basket of other major currencies, gave up its gains that jumped to the resistance of 110.17, its highest in more than two years. Meanwhile, it returned to the support area of 109.00 today, Wednesday, ahead of the announcement of the Consumer Price Index numbers, one of the most important tools for measuring US inflation, which strongly affects expectations for the policies of the US Federal Reserve Bank.
Yesterday, according to data from the economic calendar, a report showed that producer prices in the United States of America rose less than expected last month. According to the announcement, the producer price index rose by 0.2% and the core index remained unchanged during the month, while the annual rates rose less than expected to 3.3% and 3.5%, respectively.
Meanwhile, a Bloomberg report suggesting that the Trump administration is considering a month-to-month approach to tariffs has provided some respite for investors. However, the US dollar remains close to its October 2022 highs as traders bet that the Federal Reserve will deliver fewer rate cuts this year. Current expectations now suggest that financial markets are anticipating just one quarter-point rate cut, most likely in the second half of 2025 Tips:
Dear TradersUp follower, the gold path will remain upward as long as global geopolitical tensions persist and increase, in addition to the continuation of record gold purchases by central banksUS Treasury Yields Remain High
In addition to the strength of the US dollar, there is also a factor affecting the current gold price path, as the yield on the US 10-year Treasury bonds touched the 4.8% threshold, its highest level since October 2023, as the weaker-than-expected US producer price index failed to significantly change expectations of higher interest rates by the Federal Reserve this year. According to an official announcement, the main US producer prices rose less than expected, and the basic measure unexpectedly refrained from increasing before printing the US consumer price index today.
However, expectations of restrictive policy by the US Federal Reserve remained stemming from the possibility of a pro-inflationary policy by President Trump and a strong labour market. Obviously, In addition to increasing deficit spending Price Technical Analysis and Expectations Today:
Dear reader, according to gold analysts ' expectations, the general trend of the gold price index is still bullish. As we mentioned before, the resistance of $2700 per ounce will remain an important station for the bulls' control over the gold trend and may stimulate gold bullion purchases again, thus preparing for stronger upward breaches. This may help stop the gains of the US dollar if US inflation readings come in below expectations, global geopolitical tensions increase, and more gold purchases are announced.
In contrast, and on the same time frame, the daily chart will have the closest support levels for gold prices at $2665, $2652, and $2638, respectively. I still prefer to buy gold from every downward level. Technically, the RSI and MACD indicators are still higher and have the opportunity for more gains before reaching overbought levels.
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