Market Analysis

Gold Prices Stabilize Above $2,688 on Rising Inflation Fears

Dupoin · 13 Jan691.5K Views

XAU/USD

Prediction: Increase

Gold prices remained stable in early Asian trading this week as investors weighed the impact of strong U.S. employment data and President Donald Trump’s economic policies. Concerns over inflation and USD strength continue to support gold in the short term.

Fundamental Analysis:

Spot price: Gold is currently trading at $2,688.90/ounce as of 09:47 GMT, up nearly 1% over the
past week.

U.S. Gold Futures: Slightly increased by 0.2% to $2,720.20.

U.S. Non-Farm Payrolls (NFP): The report showed a significant increase of 256,000 jobs in December, far exceeding expectations. This lowered market expectations for an imminent Fed rate cut, applying slight downward pressure on gold prices. However, potential inflation
stemming from Trump’s protectionist policies continues to support gold as a safe-haven asset.

Safe-haven demand: Due to uncertainties surrounding Trump’s economic policies, investors continue to view gold as a hedge against risk.

Fed and interest rates: Following the positive employment data, markets now anticipate that the Fed will cut interest rates only once this year, possibly in June. However, comments from Fed officials this week will be closely monitored to assess future policy direction.

China and gold demand: China’s supportive economic policies are expected to bolster gold demand, especially as the country’s economy faces low inflation and weak consumer demand.

Technical Analysis:

Key resistance levels:

● $2,696: This is the nearest resistance level. If breached, the next target will be $2,721.
● $2,721: This is the highest resistance level since mid-December 2024.

Key support levels:

● $2,678: This is the first support level if prices correct.
● $2,660 (EMA 34): A key dynamic support level. If breached, the downtrend may extend towards $2,640 (EMA 89).
● $2,610 (EMA 200): The next strong support level in case prices weaken further.

RSI: The RSI is currently at 66, indicating strong upward momentum but approaching overbought territory. If the RSI rises above 70, the bullish momentum may strengthen further.

XAU/USD is likely to continue its bullish trend this week, supported by inflation concerns and safe-haven demand. However, traders should closely monitor economic data and Fed speeches to determine the long-term trend.

BTC/USD

Prediction: Decrease

Bitcoin continues to trade lower at the start of the week, with a dominant downtrend persisting after multiple rejections near the key $100,000 resistance level. Selling pressure is increasing as supportive factors wane, while critical support levels are being tested.

Fundamental Analysis:

Spot Price: Bitcoin is currently trading around $94,208, down over 8% from its recent high of $102,000.

Resistance Pressure: Last week, Bitcoin was rejected at $102,000, leading to a sharp decline to $92,000 before a mild recovery. This indicates that $100,000 remains a significant psychological and technical barrier.

Market Sentiment: The Fear & Greed Index is currently in the neutral zone, but bearish sentiment is prevailing as concerns grow about a potential break below the critical $90,000 support level.

Upcoming Events: Donald Trump’s inauguration on January 20th could have a major impact on markets, with potential policies either mitigating or exacerbating the current decline.

Technical Analysis:

Key Resistance Levels:

● $95,500 (EMA 34): This is the nearest resistance on the H4 timeframe. A break above this level could lead to a retest of the $98,000 zone.
● $100,000: This is the most significant psychological and technical resistance. If Bitcoin closes above this level, a bullish trend reversal could be triggered.

Key Support Levels:

● $93,000: The nearest support zone. A break below this level could lead to a swift decline towards $90,000.
● $90,000: The most critical support level. If breached, Bitcoin could drop further to $87,000 or even $75,000.

EMA: Bitcoin is currently trading below all key EMAs (EMA 34, EMA 89, EMA 200), confirming that the downtrend remains dominant.

RSI: The RSI is at 42, indicating that Bitcoin has not yet entered oversold territory, but bullish momentum is weak.

Supply/Demand Zone: The Bear Order Block (OB) in the $100,000 - $102,000 range remains a strong resistance zone that Bitcoin needs to break to reverse the current trend. BTC/USD is likely to continue its bearish trend in the short term, especially if the price breaks below the crucial $90,000 support zone. However, if the market holds this level, a recovery towards $98,000 - $100,000 remains possible.

Traders should monitor key support levels closely, as well as external events, which may influence market sentiment.

EUR/USD

Prediction: Decrease

The Euro continues to face downward pressure at the start of the week as strong U.S. employment data bolsters the USD’s strength. Investor sentiment remains cautious, with markets awaiting U.S. CPI data and concerned about the Fed maintaining higher-than-expected interest rates.

Fundamental Analysis:

Spot price:EUR/USD is currently trading around 1.0241, near its lowest level in over two years.

U.S. Employment Data: The U.S. non-farm payroll (NFP) report exceeded expectations with 56,000 jobs added in December, while the unemployment rate declined to 4.1%. This reduces expectations for Fed rate cuts this year.

Market Sentiment: The economic growth disparity between the U.S. and the Eurozone continues to weaken the Euro, while the USD remains strong on expectations that the Fed willM maintain its tight monetary policy for longer.

Fed Interest Rates: Markets are now pricing in only one Fed rate cut in 2025, down from two cuts previously anticipated. This adds further downside pressure on EUR/USD.

Technical Analysis:

Key Resistance Levels:

● 1.0289 (EMA 34): This is the nearest dynamic resistance level, corresponding to the 34-period EMA. A break above this level could trigger a recovery towards 1.0339 (EMA 89).
● 1.0374: A stronger resistance level that would require significant upward momentum to reverse the bearish trend.

Key Support Levels:

● 1.0221: The nearest support zone. A break below this level could lead to further declines.
● 1.0211: The recent low, marking a strong support level if the market continues to drop.

RSI: The RSI is currently at 35, indicating that the market is approaching oversold territory. However, there is no strong signal of a reversal yet.

Trend: EUR/USD is trading below all key EMAs (EMA 34, EMA 89, and EMA 200), confirming that the bearish trend remains dominant. EUR/USD remains under bearish pressure in the short term, with the primary trend reinforced by USD strength following robust U.S. employment data. The key focus for this week will be U.S. CPI data and Fed officials' speeches, which could further guide the direction of this pair.

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