Gold Prices Maintain Steady Rise Above $2,700 as USD Faces Selling Pressure

Image Credit: DaillyFx

Gold price (XAU/USD) sees buying interest at the start of the new week, continuing its steady rise during the early European session. The US Dollar (USD) faces fresh selling pressure, erasing much of Friday's gains as market participants speculate that the Federal Reserve (Fed) will cut interest rates twice this year. This development helps support the non-yielding yellow metal and halts its pullback from the one-month high reached last Thursday.

However, concerns that US President-elect Donald Trump's protectionist policies could lead to higher inflation and force the Fed to maintain a hawkish stance could limit further USD declines. Additionally, easing tensions in the Middle East and positive equity market sentiment may keep Gold's price gains in check. Traders might prefer to remain cautious and wait for Trump’s inaugural speech before making large moves.

From a technical standpoint, any upward movement is likely to face resistance around the $2,715 level, followed by the $2,724-2,725 range, marking the one-month peak from last Thursday. Given the positive momentum seen in the daily chart oscillators, further buying could push Gold towards the $2,745 resistance level, leading toward the $2,760-2,762 region. Ultimately, the XAU/USD might target its all-time high near $2,790 reached in October 2024.

On the other hand, a significant drop below the immediate support zone of $2,700-2,690 could present a buying opportunity, with further support seen near $2,662-2,660. If this level is breached, Gold could decline to the $2,635 area, followed by the $2,620-2,615 range, which includes an ascending trend-line from the November swing low and the 100-day Exponential Moving Average (EMA).

Paraphrasing text from "FXSTREET" all rights reserved by the original author.