- Gold prices fell back below $2,650, finally capping the week’s gains.
- The appetite for market risk increased on Friday after improved ISM data from the US.
- Fedspeak further cooled investor fears, and Barkin Fed soothes market fears.
XAU/USD fell on Friday, with gold prices falling by around two-thirds of a percent and falling back below $2,650 an ounce as market sentiment improved following risk appetite earlier in the week. The first week of the 2025 trading season has been choppy on global markets, but investors are still looking for reasons to strengthen their stance ahead of the fresh year.
Bank of Richmond Federal Reserve (Fed) Chairman Tom Barkin spoke to the Maryland Bankers Association on Friday, emphasizing that the Fed has already cut interest rates by a full percentage point in 2024, lowering the federal funds rate to 4.25-4.5%. range. The U.S. unemployment rate also remains at historically low levels, while inflation appears to be returning to the Fed’s target of 2% annually. The Fed’s Barkin also downplayed the potential negative effects of future President Donald Trump’s plans to pass radical tariff proposals on his first day in office that would effectively mean the United States would unilaterally enter trade wars with all of the U.S.’s closest allies and trading partners. According to Fed policymaker Barkin, markets shouldn’t worry too much about a potential 10-20% tariff on all goods imported into the U.S. because “translating tariffs into prices is not uncomplicated, it depends on many factors, including companies’ supply chains and consumer price elasticity.
Next week, American markets and institutions will have a day off on Thursday due to the death of former President Jimmy Carter, who died on December 29 at the age of 100. The first printing of the 2025 US Nonfarm Payrolls (NFP) will be released on Friday.
Gold price forecast
Gold prices have been in a coarse cyclical phase in the last quarter of 2024, with XAU/USD rates routinely hovering around the $2,650 level. Gold’s sideways trend is best highlighted by the 50-day exponential moving average (EMA), which has been sideways since early November and acts as a bid trap, holding back price action.
Bulls have repeatedly failed to hold muscle prices above $2,720, while selling pressure remains reinforced by the near-term technical floor at $2,600.
