Gold prices are consolidating near $2,669, bolstered by investor uncertainty around U.S. monetary policy and inflation expectations.

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A robust U.S. jobs report last week strengthened the dollar, making gold pricier for non-dollar buyers. However, concerns over inflation—exacerbated by President-elect Donald Trump’s tariff policies—have kept gold resilient.

“Gold is performing better during this dollar strength phase due to inflationary concerns,” noted Tim Waterer, Chief Market Analyst at KCM Trade. As gold traditionally acts as an inflation hedge, its appeal grows during periods of economic uncertainty. Investors await upcoming inflation data, including the Producer Price Index (PPI) and Consumer Price Index (CPI), to gauge the Federal Reserve’s 2025 policy trajectory.

Gold Technical Outlook: Key Levels to Watch

From a technical perspective, gold prices have found support at $2,658, with the 50-day EMA at $2,668 serving as a critical short-term level. The pivot point at $2,675 is crucial, as a break above could lead to tests of $2,697 and $2,709, with further resistance at $2,721.

Conversely, failure to hold above the $2,675 pivot may result in a slide toward immediate support at $2,658, with additional levels at $2,641 and $2,624. While the broader upward channel remains intact, RSI indicates neutral momentum, suggesting that price action could swing in either direction depending on inflation data and Federal Reserve signals this week.

Inflation Data and Fed Signals Could Shape Gold’s Path

This week, inflation reports will be pivotal for gold prices. Softer CPI figures could weaken the dollar, making gold more affordable and spurring demand. Conversely, higher inflation could strengthen the Fed’s hawkish stance, weighing on gold.

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Fed officials are also scheduled to speak, offering further clarity on interest rate expectations for 2025. “Softer inflation data could put downward pressure on the dollar and boost gold,” Waterer added.

Key Takeaways:

• Resistance Levels: $2,697, $2,709, and $2,721.

• Support Levels: Immediate at $2,658; deeper at $2,641 and $2,624.

• Inflation Data: CPI and PPI reports hold the key to short-term gold momentum.

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.

His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.

His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.