Gold prices ($XAU/USD) traded near $2,624 on Monday, reflecting a muted market tone as traders awaited significant U.S. economic data and policy updates.

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With February gold futures rising slightly by $1.10 to $2,633, the precious metal has been supported by a strong ascending trendline since early December. However, thin holiday trading and looming uncertainties have capped any decisive movement, leaving the market in a consolidation phase.

The U.S. economic calendar remains a critical focus. Reports such as the Chicago ISM business survey and pending home sales may shape the Federal Reserve’s monetary policy outlook for 2025. Meanwhile, global stock indexes are mixed, and U.S. equities point to a softer opening as concerns about weaker demand and geopolitical uncertainty persist.

XAU/USD

Mixed Momentum from Dollar and Treasury Yields

The U.S. dollar index weakened slightly on Monday, yet it is on track for its strongest annual gain in nearly a decade. This robust performance, supported by economic resilience and reduced expectations for deep rate cuts, has applied indirect pressure on gold.

In contrast, benchmark 10-year U.S. Treasury yields rose to 4.6%, reflecting investor caution. Crude oil prices, a key barometer of inflationary pressures, remain stable at $70.75 a barrel. These factors collectively influence gold’s appeal as a hedge, adding complexity to the market’s short-term outlook.

Gold’s Key Technical Levels to Watch

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Gold’s technical landscape underscores a pivotal moment. Immediate resistance is observed at $2,628, with higher thresholds at $2,652 and $2,670. A successful breakout above these levels could pave the way for bullish momentum, driving prices toward $2,690.

On the downside, support levels are established at $2,602, $2,580, and $2,556, with the ascending trendline at $2,602 acting as a critical defense against bearish moves.

Key technical indicators offer mixed signals. Gold trades slightly below its 50-day EMA ($2,629), suggesting short-term consolidation. The RSI stands at 55.04, reflecting moderate bullish sentiment and signaling potential for a breakout if buying pressure increases.

Key Insights:

• Immediate Resistance Levels: Gold faces resistance at $2,628, $2,652, and $2,670, which could limit upward movement.

• Support Zones: Critical support is found at $2,602, $2,580, and $2,556, safeguarding against extended losses.

• Market Momentum: RSI at 55.04 indicates moderate bullishness; gold remains below its 50 EMA at $2,629, showing consolidation.

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.