Gold Gains 27% in 2024 – A Safe Haven Amid U.S. Dollar Weakness and Geopolitical Uncertainty
LONDON (December 26) As the year draws to a close, trading volumes remain lower, influenced by the holiday season. Gold has rallied 27% this year, marking its best performance since 2010. Analysts suggest that the surge is driven by the Federal Reserve’s dovish stance and heightened geopolitical instability.
The U.S. dollar index (.DXY) ticked lower, making gold more affordable for holders of other currencies. IG market strategist Yeap Jun Rong noted that the lack of significant movement in the dollar and Treasury yields allowed gold to recover from its post-Fed dip.
The Role of Geopolitical Tensions in Gold’s Surge
Geopolitical unrest in the Middle East, specifically the ongoing Hamas-Israel conflict, is contributing to the bullish outlook for gold. Brian Lan, Managing Director at Singapore-based GoldSilver Central, stated that if the situation escalates, gold could see further upside. Traditionally, gold performs well in times of geopolitical turmoil, as it is considered a safe-haven asset.
In addition to geopolitical factors, traders are closely monitoring the U.S. jobless claims data set to be released, as well as major policy shifts under President-elect Donald Trump, including potential tariffs and tax changes. Analysts expect that these developments could further impact gold prices in the coming months.
Gold’s Technical Outlook and Key Price Levels
Gold is currently trading at $2,626.09, with immediate resistance at $2,630.00. A breakthrough above this level could propel gold towards $2,640.00. On the downside, support is seen at $2,610.00, which will be crucial for determining whether the current bullish trend will continue.
The Relative Strength Index (RSI) sits at 53.20, reflecting neutral-to-bullish momentum, while the 50-day Exponential Moving Average (EMA) supports the ongoing rally. Traders should keep an eye on gold’s behavior around the $2,630.00 resistance, as a successful breakout could signal further gains in the near term.
FXLeaders
