Gold prices rose sharply even as US jobs data came in better than expected. It reached a high of $2,698 and is currently trading around $2687.
Federal Reserve's Cautious Stance
The Federal Reserve will most likely stop cutting rates in 2025, given the cautious approach towards strong economic data and the still-existing inflationary concerns. It has brought the benchmark interest rate to a range of 4.25% to 4.50%. However, further cuts in the coming times are unlikely to be as aggressive as before. The economy added 256,000 jobs last December, while the unemployment rate fell to 4.1%. Originally, the Fed had predicted four rate cuts in 2025 but now only two because inflation remains at 2.5% by year-end. The Wall Street reaction was negative because the major indices fell as investors closed out parts of their outlook in light of these changes. Overall, the Fed is shifting toward a more stable monetary policy rather than aggressive easing. This will translate to fewer cuts in 2025 as they balance the need for growth with inflation concerns.
Rate Pause rose Significantly
According to the CME Fed Watch tool, the probability of a rate pause has increased to 97.30% from 91.40% a week ago.
Technical Analysis: Support, Resistance, and Trading Strategy
Gold prices are trading above both short-term and long-term moving averages which shows that the overall trend is bullish. The yellow metal’s neat term support is at $2,670, and a break below this level will drag the gold toward $2,650, $2,620,$2600/ $2,570, $2,559, $2,536, and eventually $2,500. The immediate resistance is at $2700, with potential price targets at $2725/ $2,775.
It is good to buy on dips around $2660, with a stop-loss at $2,630 for a target price of $2,750


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