Gold Holds Modest Gains Amid Mixed Economic Sentiment by Amit Gupta, Kedia Advisory
Gold prices regained modest traction but lacked strong bullish momentum amid falling US bond yields and a strong US Dollar. The precious metal faced resistance near $2,690 as hawkish Federal Reserve policies and upbeat US economic data, such as Nonfarm Payrolls, limited significant upward movement. Reports of potential inflation-friendly tariff strategies under President-elect Trump further influenced the market, fostering a risk-on sentiment. Investors now focus on US inflation data, including the Producer Price Index (PPI), for additional direction. Gold's near-term outlook suggests resistance around $2,700 and support near $2,656, with market participants cautious of broader economic shifts.
Key Highlights
* Gold gains amid sliding US bond yields and dip-buying.
* Hawkish Federal Reserve stance caps bullish momentum.
* Strong US economic data supports the US Dollar's strength.
* Tariff strategies under Trump boost risk-on sentiment.
* Focus shifts to US inflation data for fresh cues.
Gold prices showed modest gains on Tuesday, attracting dip-buyers after a slight pullback in US bond yields. However, the precious metal remains below its recent one-month high as investors assess a mix of economic factors. Hawkish Federal Reserve policies, following a robust Nonfarm Payrolls (NFP) report, have kept rate-cut expectations minimal, limiting gold's bullish momentum.
Despite these headwinds, sliding US bond yields offered temporary relief for gold, as did reports of President-elect Donald Trump’s economic advisers considering phased tariff strategies. These measures aim to curb inflation spikes, fostering market confidence and a risk-on sentiment that indirectly weighs on safe-haven assets like gold.
On the technical front, gold faces resistance near $2,690, with the $2,700 level acting as a significant psychological barrier. Any sustained breakout above this zone could extend the uptrend toward $2,717 or higher. Conversely, immediate support rests at $2,656, with a breach potentially exposing $2,635 and $2,610 levels.
Market participants are now focused on US inflation data, starting with the Producer Price Index (PPI) and consumer inflation figures later this week. These indicators will provide critical insights into the Federal Reserve's monetary policy trajectory, directly influencing gold's performance.
Finally
Gold prices hold steady amid mixed economic signals, with resistance at $2,700 and support near $2,656. Inflation data remains pivotal for further direction.
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