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Gold Shines Bright Amid Geopolitical Tensions: Strategies for 2025 Success

Gold showed a minor pullback despite US dollar buying, hitting an intraday high of $2,646.31 and currently trading around $2,645.70.

Safe-Haven Demand Amid Geopolitical Tensions

Gold prices are getting strong support as safe-haven investments due to ongoing geopolitical tensions as the new year starts. In early 2025, gold is rising from around $2,600 and aiming for $2,650, even with a strong US dollar, which usually puts pressure on gold prices. Ongoing conflicts, especially in the Middle East and Ukraine, are making gold more appealing as investors fear economic instability. Market caution also comes from expectations about President-elect Donald Trump's policies and the Federal Reserve's plans on interest rates, which are causing uncertainty. A recent survey suggests that central banks are likely to increase their gold purchases this year, supporting demand. Gold typically rises when the dollar weakens, but it's still gaining value despite a strong dollar because of high demand for safe-haven assets. Overall, gold is expected to remain a popular choice for investors looking to avoid risk in 2025.

Fed Rate Expectations

According to the CME FedWatch Tool, the probability of a Fed rate pause decreased to 88.80%, down from 89.30% a week prior.

Technical Analysis and Trading Strategy

Gold prices are currently above both short-term and long-term moving averages, indicating a bullish trend. Immediate support is at $2,620; any break below will drag the yellow metal down to $2,600, $2,570, $2,559, $2,536, and $2,500. The near-term resistance is around $2,645, with the potential to target higher levels of $2,670, $2,700, and $2,775. It is advisable to buy on dips around $2,610, set a stop-loss at $2,570, and aim for a target price of $2,725

 

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