Last Friday, gold prices faced slight pressure due to a stronger dollar but managed to rise over the week's trading. Spot gold dropped 0.45%, closing at $2,702.35 per ounce; U.S. gold futures dipped 0.1% to $2,748.70 per ounce. David Meger, head of metals trading at HighRidge Futures, stated that Friday's pullback was mainly due to profit-taking by investors, with the dollar's slight intraday strength also exerting some pressure on gold prices.
Factors Behind Gold's Rise
Last Thursday, gold prices touched a one-month high, just $65.6 away from the record high of $2,790.15 set last October. Over the past week, gold prices have increased by 0.5%, marking the third consecutive week of gains. This is mainly attributed to the U.S. core inflation data released last Wednesday being lower than market expectations, fueling speculation that the Federal Reserve might accelerate its interest rate cuts.
Traders currently anticipate two rate cuts by the Federal Reserve before the year's end. Fed Governor Waller recently noted that more rate cuts might be implemented if economic data deteriorates further. Market analysts believe that expectations of rate cuts and the weakening dollar have provided robust support for gold prices in recent weeks.
Focus on Trump's Policies and Safe-Haven Demand
Another major focus for the market is the upcoming inauguration ceremony of President Trump on January 20th. The Trump administration plans to implement broad trade tariff policies, which may lead to rising inflation and global trade tensions, thereby increasing the allure of gold as a safe-haven asset.
Ajay Kedia, head of Mumbai's Kedia Commodities, analyzed, "The current support level for gold is at $2,694, and if it breaks through $2,720, the next target will be the high of $2,770." Additionally, the volatility of the dollar may continue to affect gold prices in the short term.
Performance of Other Precious Metals
Similar to the gold market, other precious metal prices showed a mixed trend. Spot silver fell 2%, closing at $30.17 per ounce; palladium rose 1% to $949.99; platinum increased by 0.9% to $940.28. Analysts point out that the overall performance of the precious metals market remains closely tied to the dollar's movement, and future economic data and policy changes will further influence market sentiment.
Looking Ahead
As Trump's new policies gradually unfold and the prospect of Fed rate cuts becomes clearer, the gold market may face more volatility. Investors should closely monitor upcoming economic data and policy announcements to seize the investment opportunities brought about by market changes.
