Gold prices continue to struggle to move higher, despite remaining above the $2,600 level, with many market analysts expecting gold to remain in a narrow range in the last week of 2024 due to lower trading volumes.
Markets will be closed midweek on January 1st, so many analysts are choosing to celebrate the new year rather than focus on financial markets. However, unless there is a major surprise, analysts predict that gold prices will remain stuck in a narrow range due to the rising bond yields and the demand for safe havens created by geopolitical and economic uncertainties. According to the information you received from Kriptokoin.com, gold prices were limited to $2,650 last week. On the other hand, the yield on 10-year Treasury bonds rose to 4.64%, which was the highest level in the last seven months. This situation created serious pressure on the market.
Bond yields remain above 4.6%, while gold prices continue to move within a certain range. Spot gold was trading at $2,622, down 0.45% on the day and down 0.15% on the week. FX Empire market analyst James Hyerczyk said on Friday:
Gold’s resistance levels this week were shaped by rising geopolitical tensions. Investors are closely following conflicts in Eastern Europe and the Middle East. In particular, Israel’s attacks on Houthi targets in Yemen and Russia’s drone strikes in Ukraine have increased gold’s appeal as a safe haven. These developments continue to drive the ground volatility beneath the geopolitical environment. In addition, some analysts say that President Donald Trump’s social media comments on annexing Canada, the Panama Canal and Greenland are also creating tension. Hyerczyk emphasizes that the $2,607 level is a critical support point for the coming week. The analyst, who states that gold needs to break through the $2,665.65 level in order to start rising again, says that a downward movement is more likely in the current environment.
According to Hyerczyk, the short-term outlook for gold is shaping up negatively as rising bond yields and a strong dollar become more dominant factors than geopolitical risks. However, he notes that these movements occurred during a week when trading volumes were historically low, which could limit the trading process. When looking at economic data, it is possible to say that the markets will have a lighter agenda towards the end of the year. At the end of the year, markets will receive some housing sales data and manufacturing data. In addition, data on the US labor market will be monitored, especially next week's unemployment claims data will be important. Last week, the number of continuing unemployment claims rose to the highest level in the last year, while the number of people applying for unemployment benefits for the first time remained unchanged. This suggests that those who were laid off are having difficulty finding new jobs. LPL Financial Chief Economist Jeffrey Roach says that the increase in applications is a sign that the labor market is slowing.
Weekly Economic Calendar
Monday: US Home Sales Pending
Wednesday: New Year's Eve
Thursday: US Weekly Jobless Claims
Friday: ISM Manufacturing PMI