Gold has experienced a minor pullback due to an increase in safe-haven demand, hitting a low of $2,614 and currently trading around $2,645.
Ongoing Conflict and Its Effects
The war between Russia and Ukraine enters 2025. The Russians are upping the intensity of attacks as the Ukrainians win territory in other parts of the country. The parties have announced a preliminary agreement on regular prisoner exchanges, especially focusing on prisoners seriously ill or wounded. Ukrainian President Volodymyr Zelensky has called for a strong military presence and security guarantees from Western allies if he is to achieve a "just peace" in Ukraine. Experts warn the conflict could go either into a stalemate or see new breakthroughs in eastern Ukraine. The war is also causing instability in the Middle East, with rising grain and energy prices that threaten unrest and complicate diplomatic efforts, particularly regarding the Iran nuclear deal.
Market Insights
Market participants watch the upcoming FOMC meeting minutes and US Non-Farm Payroll data for further direction. According to the CME FedWatch tool, the probability of a rate pause has increased to 93.1%, up from 90.40% a week ago.
Technical Analysis of Gold
Gold prices are trading above both short-term and long-term moving averages confirming a minor uptrend. Immediate support is at $2,630, and a break below this level could lead to declines toward $2,620, $2,600, $2,570, $2,559, $2,536, and eventually $2,500. The near-term resistance is at $2,670, with potential price targets at $2,700 and $2,775. It is advisable to buy on dips around $2,630, with a stop-loss set at $2,600 and a target price of $2,725.