U.S. Treasury yields fell on Thursday as bond markets reopened, reflecting investor caution ahead of incoming economic data. The 10-year yield ended above 4.5% in 2024, with choppy movements throughout the year. Traders are closely watching unemployment claims and manufacturing data for more insight into economic health. The Fed’s December signals of limited rate cuts through 2025 suggest gold could continue to benefit from a high-rate environment that puts pressure on equity markets.
Dollar pressure and currency trends
The dollar weakened slightly at the start of 2025, with the yen recovering modestly from a five-month low. Currency markets remain focused on the widening interest rate gap between the US and other economies, increasing demand for the dollar. However, a potential slowdown in US growth later this year could threaten the dollar’s continued strength, which would indirectly support gold prices.
Market Forecast: Bullish Outlook for Gold
Gold’s technical position points to further near-term gains, with the market eyeing $2659.15, the 50-day moving average and beyond. Traders are likely to be cautious ahead of Trump’s inauguration on January 20 and the Fed meeting in January. Inflationary pressures and geopolitical risks continue to favor gold as a safe haven, reinforcing bullish sentiment in the first quarter of 2025.
More information in our Economic Calendar.