XAU/USD Awaits Direction Below $2,650 on Mixed Market Signals

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Gold prices (XAU/USD) remained under pressure, hovering near $2,640 in early Asian trading on Monday, as a robust US Dollar (USD) weighed on the metal.

The uptick in the USD followed stronger-than-expected US ISM Manufacturing PMI data, and traders are now focusing on US labor market figures for December, due Friday, for further direction.

The Institute for Supply Management (ISM) reported on Friday that the US Manufacturing PMI rose to 49.3 in December, up from 48.4 in November, and surpassing the consensus estimate of 48.4.

This positive data supported the Greenback, thereby pressuring the USD-denominated gold prices.

Additionally, the Federal Reserve’s guidance for a slower pace of interest rate cuts dampened sentiment for non-yielding assets like gold.

While the Fed reduced interest rates in December, it signaled a more gradual decline in borrowing costs throughout the year.

However, ongoing economic uncertainties and geopolitical tensions could lend support to gold as a safe-haven asset.

Over the weekend, clashes between Israel and Hamas continued, with reports of more than 100 casualties in Gaza due to Israeli strikes, as both sides negotiated a potential ceasefire and the return of hostages.

Gold may also find support from central bank purchases, which are expected to remain strong in 2025, with net buying forecasted at around 8 million ounces, similar to or slightly lower than 2024 levels.

 

 

 

 

 

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