Gold continues to gain support from the Federal Reserve’s recent dovish pivot
Gold prices retreated from a five-week high on Friday, as profit-taking emerged at the week’s end following a three-day rally.
The metal remains supported by softer-than-expected US core inflation data for December, which has bolstered expectations of further Federal Reserve rate cuts in 2025.
Markets are now pricing in two rate cuts, compared to the initially signaled single cut for the year. Adding to optimism, recent remarks from a Fed Governor suggested the possibility of three or even four cuts if upcoming data point to further economic weakness, fueling hopes of more aggressive policy easing.
However, some economists urge caution, anticipating that the Trump administration’s economic initiatives, including new tariffs on imports, could accelerate US economic growth and reignite inflationary pressures.
From a technical perspective, the outlook remains firmly bullish. Gold is on track for its third consecutive weekly gain, reinforcing the positive near-term trend. A weekly close above key levels at $2700 and $2693 (psychological resistance and the 61.8% Fibonacci retracement of $2790/$2536) would solidify the bullish momentum.
These levels now act as robust supports, expected to limit any pullbacks and maintain the broader uptrend.
The next immediate targets are $2726-$2730 (December 12 lower top and the 76.4% Fibonacci retracement) and $2749 (the November 5/6 double top), with the record high of $2790 (set on October 31) remaining in focus.
Traders should remain cautious of a dip below $2693, though the broader bullish structure is likely to remain intact as long as support at $2675 (the broken bearish trendline and rising 10-day moving average) holds firm.
Res: 2726; 2730; 2749; 2762
Sup: 2700; 2693; 2675; 2663