By Ebestnations 
Key Points:
Gold prices decreased by 0.45% to $2,622, influenced by increasing Treasury yields and a stronger dollar, which exerted pressure on non-yielding assets.
Short-term resistance for gold is identified at $2,629, with significant resistance at $2,665, which corresponds with the 50-day moving average.
The dollar index has risen for four consecutive weeks, contributing to the decline in gold prices as 10-year yields reached 4.641%, marking a seven-month peak.
The potential impact of Trump’s tariffs and trade policies may enhance gold’s appeal as a safe-haven asset amid ongoing geopolitical uncertainties extending into 2025.
Despite a 28% increase in gold prices in 2024, challenges remain; however, analysts predict that central bank purchases could propel prices towards $3,000 by mid-2025.
Gold Price Forecast
In this article:
Gold
-0.41%
Gold Prices Decline as Treasury Yields Rise
On Friday, gold prices experienced a decline, influenced by the upward movement of U.S. Treasury yields during a period of low trading activity due to the holidays. Spot gold fell by 0.45% to $2,622.03. The combination of higher yields and a strengthening dollar diminished the attractiveness of bullion for investors focused on non-yielding assets.
Dollar Strength Reduces Gold’s Appeal
The dollar index has continued its upward trend for the fourth week, further limiting gold’s demand. The benchmark 10-year Treasury yields increased to 4.641% on Thursday, the highest level since May, bolstering the dollar’s strength. Jobless claims for the week ending December 21 were reported at 219,000, lower than anticipated, while continuing claims reached their highest level since November 2021. These statistics indicate a robust labor market, reinforcing expectations for a hawkish Federal Reserve in 2025.
Gold’s 2024 Surge Encounters New Challenges
Gold has surged by 28% this year, achieving a peak of $2,790.17 in late October, driven by the Federal Reserve’s easing cycle and global geopolitical tensions. However, the prospect of fewer rate cuts in 2025 may hinder gold’s upward trajectory. Nevertheless, analysts maintain a positive outlook, highlighting strong central bank purchases and geopolitical risks as significant factors supporting continued price strength.
Geopolitical Risks and Trump’s Policies May Propel Gold Prices in 2025
As Donald Trump gears up for a potential return to the presidency, his anticipated tariffs and protectionist strategies could instigate trade disputes, thereby increasing gold’s allure as a safe-haven asset. Additionally, central banks are likely to continue their robust gold acquisition strategies, with some experts forecasting that prices could exceed $3,000 by mid-2025 if prevailing trends continue.
Short-Term Outlook Indicates Resistance at $2629.13 and Support at $2607.35
Daily Gold (XAU/USD)
The long-term outlook for gold remains optimistic, although short-term resistance is emerging at $2629.13, with a more significant resistance level at $2665.52, which coincides with the 50-day moving average. Minor support levels are identified at $2607.35 and $2583.91, while major support is positioned lower at $2536.85.
Increasing Treasury yields and a robust dollar may constrain further short-term gains. Traders should keep a close watch on bond yields and updates from the Federal Reserve, as these elements are likely to influence gold’s forthcoming trajectory.
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