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XAUUSD - The CPI index will determine the gold path!Gold is located in a 4 -hour timeframe above EMA200 and EMA50 and is on its uptrend channel. If weaken in CPI data and market concerns about inflation, gold buying opportunities. The release of the headline stronger than the expectation of the CPI will result in the uptrend and decrease in gold. But in the secondary wave it will result in gold climbing. Gold prices have reached their highest levels in approximately four weeks, nearing the $2,700 range. Recent changes in stock markets and concerns over U.S. economic policies have driven increased demand for gold. Several key factors have contributed to the recent price surges. First, rising global tensions, particularly involving major powers such as the U.S., Russia, and China, have destabilized financial markets, prompting investors to turn to gold as a safe-haven asset to shield against potential crises. Second, persistent concerns about inflation in major economies have made gold an attractive option for preserving purchasing power. Additionally, central banks have significantly increased their gold reserves, boosting demand. Finally, expectations of interest rate cuts or potential easing by central banks, including the Federal Reserve, have further enhanced gold’s appeal. Gold prices have previously experienced sharp declines. Between 2011 and 2015, gold lost nearly 45% of its value, falling from its peak of $1,920 per ounce to $1,050 per ounce, driven by a strong dollar, rising interest rates, and an improving economy. Beyond this historical context, other scenarios could also lead to a 30% decline in gold prices. For instance, if the Federal Reserve adopts unexpectedly aggressive monetary policies and raises interest rates faster than anticipated, the strengthening dollar would exert downward pressure on gold prices. A sudden increase in gold supply could also push prices lower, whether due to the discovery of new reserves or the sale of gold holdings by central banks or large institutions. Moreover, robust improvements in global economies alongside geopolitical stability could dampen demand for gold. Finally, growing investor interest in alternative assets, such as cryptocurrencies or other commodities, could diminish gold’s perceived value. Paul Williams, CEO of Solomon Global, has forecasted that the factors driving 39 record-breaking gold price highs last year remain intact and could support further price growth in 2025. In his report, Williams stated: “The year 2024 reinforced gold’s role as a timeless and safe asset. In a world filled with geopolitical conflicts and economic uncertainties, gold has provided stability and security for investors. The record highs achieved in 2024 reflect not only market conditions but also a broader sense of caution and risk mitigation among investors. This trend appears poised to continue into 2025.” Meanwhile, The Wall Street Journal has released predictions from 17 economists on U.S. inflation data set to be announced on Wednesday, January 15, 2025. In 2024, the Federal Reserve made limited progress in curbing inflation, with most inflation indicators only slightly declining from the start of the year. Although policymakers had hoped inflation would approach the 2% target, persistent inflationary pressures have kept it near 3%. However, November’s Consumer Price Index (CPI) report offered a glimmer of hope. Prices in sectors such as housing and services, which have been major drivers of persistent inflation, have begun to ease. This may lead to an unexpected decline in Wednesday’s CPI data, although more significant decreases are likely in early 2025. Analysts predict a monthly CPI increase of 0.3%, which is lower than the 0.4% forecast from the Federal Reserve Cleveland’s Inflation Nowcast model. According to these projections, annual CPI is expected to rise from 2.7% to 2.9% in November. Given that markets currently price in only two 25-basis-point rate cuts for all of 2025, a strong CPI report may not elicit a major market reaction. However, if CPI data comes in weaker than expected, the U.S. dollar could face selling pressure.
FOREXCOM:XAUUSDShort
by Ali_PSND
XAGUSD - Silver, waiting for the release of the CPI index!Silver is in a 4 -hour timeframe, between EMA200 and EMA50, moving in its upside channel. If you continue the decline, we can see the channel floor failure and a limited support. Silver stabilization above the resistance range will provide us with silver climbing route to the supply zone, where we can sell at a proper risk. The U.S. employment report for December disrupted expectations regarding Federal Reserve policies, highlighting the Consumer Price Index (CPI) as a key market driver. Job creation surged by 256,000, significantly surpassing the forecast of 160,000, while the unemployment rate dropped to 4.1%. This data triggered a sharp rise in Treasury yields, with the 10-year yield reaching 4.79%, the highest level since 2023. Higher yields increase the cost of holding non-yielding assets like silver, which could face headwinds if inflation accelerates. Markets now expect the Federal Reserve to hold off on rate cuts until at least June, a notable shift from earlier forecasts anticipating rate reductions in spring. A hotter-than-expected CPI report could further delay this timeline, strengthening the dollar and potentially putting pressure on silver prices. Silver’s industrial role continues to support its prices, driven by robust global demand in industries like solar energy and electronics.The production of solar panels, a major consumer of silver, remains a key driver, while geopolitical and inflationary risks have boosted silver’s appeal as an inflation hedge. Gold’s stability in a high-yield environment has indirectly supported silver as well. Amid stock market volatility, investors have turned to both precious metals. The S&P 500 has declined by 1% year-to-date. Additionally, concerns over tariffs and the fiscal policies proposed by President-elect Donald Trump have increased demand for safe-haven assets. Meanwhile, speculation around Trump’s potential policies, including tariffs and spending programs, has heightened market uncertainty. Markets are grappling with whether these measures will stoke inflation or negatively impact growth, creating mixed conditions for silver. Major global banks are revising their forecasts for Federal Reserve monetary policy. Bank of America has stated it no longer expects any rate cuts in 2025. The bank believes the Fed’s rate-cutting cycle has ended and sees the next move as more likely to be a rate hike. Citi has also updated its projections, announcing that it no longer anticipates a Fed rate cut in January. The bank now forecasts a potential rate reduction in May. Deutsche Bank has similarly noted that the Fed is unlikely to lower rates in the near term. The bank believes the Fed is currently in a wait-and-see mode, with future actions heavily dependent on incoming economic data. Meanwhile, Goldman Sachs predicts the Fed will implement two 0.25% rate cuts in June and December, totaling 0.5% for the year. This marks a revision from its earlier forecast of a 0.75% reduction. Finally, Morgan Stanley has indicated that the likelihood of a near-term rate cut has diminished. However, the bank still considers a rate cut in March plausible due to an improving inflation outlook.
OANDA:XAGUSDLong
by Ali_PSND