Gold prices declined as the precious metals market consolidated amid mixed signals from the Federal Reserve and strong equity markets. Improving economic optimism has reduced safe-haven demand, but uncertainties around US inflation, Federal Reserve policy, and upcoming economic measures continue to influence sentiment.
Gold drops amid inflation concerns
Gold prices fell by 0.72%, closing at 2671.45 after recovering from an intraday low of 2663.17.
This movement reflects broader consolidation within the precious metals market, influenced by mixed signals from the Federal Reserve and strengthening global equity markets. Demand for safe-haven assets remains subdued as economic optimism improves.
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The outlook for President-elect Donald Trump’s proposed policies, including potential tariffs that could drive inflation, alongside investor caution ahead of key US economic data, continues to lend some support to gold.
Inflation data in focus
Speeches from Federal Reserve officials scheduled this week could provide insights into the central bank’s 2025 policy direction.
Lower-than-expected inflation figures may weaken the US dollar, potentially boosting gold prices by making the metal more affordable for international buyers.
Gold declines to 2671, rebounding off 2663 lows as early signs of bullish momentum emerge, as seen on the VT Markets app.
Technical analysis on the 15-minute chart highlights a consistent bearish trend, with moving averages (MA5, MA10, MA30) sloping downward throughout the session.
However, the MACD (12,26,9) indicates early signs of recovery, as the histogram turns positive and the MACD line crosses above the signal line, suggesting a potential shift in momentum.
Supporting factors for gold prices
Gold retains its appeal as a hedge against inflation, especially amidst uncertainties surrounding Trump’s policies and their potential to drive price pressures.
Although a strong US dollar usually weighs on gold, persistent inflation concerns, and the possibility of weaker CPI data could provide upward momentum.
The next significant movements in the gold market will likely depend on US inflation figures and Federal Reserve commentary this week.
Traders should prepare for potential volatility in both gold and the US dollar markets.
