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Gold prices continue their upward momentum, surging by over 27% in 2024, marking the best annual performance since 2010. Safe-haven demand, driven by geopolitical tensions in the Middle East and Ukraine, along with central bank purchases, has supported the rally. The US Dollar's retreat from multi-year highs and China’s pro-growth policies further bolster gold’s appeal. However, a hawkish stance from the Federal Reserve could challenge the metal's performance in 2025. Technically, gold is trading above key Exponential Moving Averages, indicating a bullish outlook, with resistance at $2,700 and support near $2,626.

Key Highlights

# Gold surged over 27% in 2024, marking its best year since 2010.

# Geopolitical tensions and central bank buying fueled safe-haven demand.

# US Dollar Index retreated, making gold more attractive globally.

# Federal Reserve’s hawkish shift may challenge gold’s momentum.

# Gold trades near $2,630, with technical resistance at $2,700.

Gold prices extended gains for the third consecutive session on Thursday, marking an over 27% increase in 2024, the strongest annual rise since 2010. This rally has been primarily driven by heightened safe-haven demand amid ongoing geopolitical tensions, such as the Russia-Ukraine conflict and unrest in the Middle East. Additionally, record central bank purchases and a softer US Dollar have further bolstered gold’s appeal.

The US Dollar Index, which had reached a multi-year high of 108.58, has since retreated, making gold cheaper for overseas buyers. This development, coupled with China's pro-growth policies and recovering sectors, has added support to the precious metal. However, the Federal Reserve's cautious approach to rate cuts in 2025, amid uncertainties surrounding the Trump administration’s economic policies, could pose challenges to gold's performance.

On the technical front, gold is trading near $2,630 per ounce, surpassing its nine- and 14-day Exponential Moving Averages, indicating bullish momentum. Resistance lies at the psychological level of $2,700, with further barriers near $2,726. Key support levels include $2,626 and the monthly low of $2,583.

Other developments include geopolitical events impacting market sentiment. Russia’s drone attacks on Ukraine and Israel’s airstrikes in Gaza have intensified tensions, further fueling demand for the safe-haven asset.

Finally

Gold remains a favored asset amid geopolitical uncertainties, with bullish technical signals suggesting further upside. Resistance at $2,700 and support near $2,626 define the short-term outlook.

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