At 11:56 GMT, XAU/USD is trading $2671.16, up $9.50 or +0.36%.
Demand for Safe-Haven Boosts Gold to Near Four-Week High
Gold remains supported around a four-week high as safe-haven demand counters headwinds from a stronger US dollar and higher government bond yields. Investors are closely watching geopolitical and economic uncertainties, especially newly elected President Donald Trump’s proposed tariffs, which could create inflationary pressures and increase gold’s appeal as an inflation hedge.
The dollar index traded near a one-week high, limiting gold’s appeal to non-dollar holders, while 10-year Treasury yields rose to their highest level since April at 4.73%. Such conditions could weigh on gold’s upward momentum unless demand for safe havens increases.
Fed policy and economic data in pictures
The minutes of the Federal Reserve’s December meeting showed concerns about persistent inflation, complicating expectations for rate cuts in 2025. While markets expect only two quarter-point rate cuts this year, continued quantitative tightening and trade policy uncertainties could influence the Fed’s approach.
Eyes now turn to Friday’s U.S. nonfarm payrolls report, with economists predicting a 160,000 job gain for December. A weaker-than-expected interest rate increase could ease fears of rate hikes, which could provide support for gold.
Market Outlook: Gold faces mixed signals
Gold prices operate in a complex environment influenced by inflation risks, monetary policy and geopolitical uncertainty. While safe-haven demand and near-term technical momentum make for a bullish scenario, a stronger dollar and higher yields could dampen gains.