Gold prices are closing 2024 on a remarkable note, gaining 27% over the year, its strongest annual performance since 2010.
However, the yellow metal’s recent price movements reflect a mixed outlook, with bearish momentum in Q4 driven by hawkish Federal Reserve policies and robust economic data.
Gold price dynamics (December 2024). Source: TradingView.
Gold’s impressive yearly rally has been underpinned by strong central bank purchases, rising geopolitical tensions, and monetary easing policies from major economies. However, Q4 introduced headwinds as the Federal Reserve’s hawkish stance, supported by strong labor market data and persistent inflation, shifted market sentiment. The Fed’s projection of fewer rate cuts in 2025 weighed on Gold prices, as the non-yielding asset faced pressure from higher interest rate expectations.
Gold price outlook: $2,600 holds as key level amid Fed hawkish policies
After facing resistance last week from the Fibonacci 0.786 retracement level and the 100 EMA on the 4-hour chart, Gold began this week on a downward trajectory. Prices dropped 1.2% from $2,625 to a five-day low, breaking the support of its previous bullish channel. However, the $2,600 psychological level acted as a key support, limiting further losses. As of today, the final trading day of 2024, Gold is trading above $2,610, with the RSI below 50, suggesting room for further downside but not yet oversold conditions.
As the new year approaches, the market is keenly watching key levels and indicators for Gold’s next moves. Gold may find renewed support as markets assess the economic implications of the incoming Trump administration. Potential trade tariffs and policy adjustments could heighten risk aversion, increasing demand for safe-haven assets like Gold.
While ending the year on a slightly weaker note, Gold’s overall performance highlights its resilience in a year marked by economic uncertainty. A break below $2,600 could open the door for further losses, but geopolitical and macroeconomic risks may provide fresh bullish opportunities in the new year ahead.
Gold prices rose nearly 1% on Boxing Day, reaching a five-day high amid bullish momentum. The price rally was capped at the Fibonacci 0.786% level, aligning with the 50-period EMA.
