Is There Still Opportunity as Gold Reaches 4-Week High?

With the Fed slowing down its rate cuts and the strength of the dollar, the question remains whether golds upward trend can continue, becoming the focus of market attention.

On Thursday (January 9), during the early Asian trading session, spot gold oscillated at high levels, trading at $2662.012 per ounce, near the highest point in the past four weeks, which was $2669.83. The increase in gold prices was largely driven by weaker-than-expected December private payroll data, which raised market expectations for a more dovish stance from the Fed, further supporting golds rise.

Although gold prices dipped after reaching $2669, they remain at relatively high levels, with investors maintaining a strong bullish sentiment.

The December private payrolls report showed that the U.S. economy added only 122,000 jobs, below the expected 140,000. This weak data raised concerns in the market, leading investors to believe that economic growth might be lower than expected, which could affect Fed policy adjustments.

Typically, weaker-than-expected employment data boosts golds appeal, as gold performs well during periods of economic uncertainty. However, the market remains cautious ahead of the upcoming non-farm data, as any stronger-than-expected numbers could have a negative impact on gold prices.

Can Gold Continue to Rise?

The market remains cautiously optimistic about golds continued rise. On one hand, policy expectations from President Trump, such as tax cuts and deregulation, could stimulate economic growth but also raise concerns about inflation, which would support gold.

On the other hand, rising U.S. bond yields and the strong dollar may put pressure on gold. Nonetheless, the technical outlook for gold remains bullish, with strong support at the middle Bollinger Band. The bullish crossover signals from the MACD and KDJ indicators suggest that gold prices may continue to rise in the short term, with the next target possibly reaching the upper Bollinger Band at $2700 per ounce.

While gold prices have risen recently, investors should remain cautious. The Fed‘s future policy moves, U.S. employment data, and the implementation of President Trump’s policies will directly influence the gold market's direction. The market should closely monitor the upcoming economic data to determine whether gold can sustain its current bullish momentum.