Gold holds steady in holiday trading, weighed by geopolitical risks and a robust Dollar.
- Geopolitical risks in the Middle East and Ukraine drive safe-haven demand for gold, though its gains are capped by a strong US dollar.
- The rise in US bond yields, with the 10-year Treasury reaching its highest level since May, further curbs gold’s momentum.
- Low holiday trading volumes keep gold confined within a range in the short term, preventing significant price movements.
Gold prices have risen to the $2,620 range, bolstered by geopolitical risks and a slight easing in US Treasury yields. Heightened safe-haven demand stemming from tensions in the Middle East and Ukraine has spurred increased interest in gold. However, the Federal Reserve’s hawkish stance, indicating a more gradual approach to interest rate cuts in 2025, curbs the potential for substantial price gains.
Conversely, the US dollar’s strength continues to exert downward pressure on gold prices. The impact is compounded by rising US bond yields, with the 10-year Treasury hitting its highest level since May. While geopolitical tensions and safe-haven demand offer near-term support, gold’s upside remains constrained by the robust dollar and elevated bond yields.
Holiday-thinned trading volumes further limit significant price movements.
Market attention will turn to the Richmond Manufacturing Index for additional clarity on the US economy and monetary policy. This data, alongside evolving geopolitical developments, is expected to shape gold’s trajectory for the week.
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