Gold Price News: Gold Tests Recent Three-Week Highs

Gold prices nudged higher on Tuesday to test the three-week highs seen on January 3^rd, although prices stayed within their recent range as the markets awaited fresh inputs.

Prices climbed to a high of $2,665 an ounce on Tuesday, testing the January 3^rd high of $2,666 an ounce. However, the market lacked the momentum to push above this level, leaving prices to ease back down to around $2,650 an ounce later in the session.

US ISM Services PMI data released on Tuesday showed a larger-than-expected increase in business activity in December, while separate figures showed a larger-than-expected rise in job openings in November. The latest bullish economic figures may be seen as decreasing the chances of US interest rate cuts in the coming months – a bearish factor for gold prices.

Gold caught between opposing forces

Gold has seen range-trading at around $2,585 to $2,660 an ounce since mid-December, showing no convincing momentum to break out in either direction thus far. This reflects a market caught between opposing forces. On the one hand, the incoming Trump administration’s policies in the US may have an inflationary effect, casting doubt over the likelihood of future interest rate cuts by the US Federal Reserve. On the other, precious metals continue to take support from an environment of heightened geopolitical risk and policy uncertainty.

A bullish tone also came from news reports on Tuesday that China’s central bank had added to its gold reserves in December for a second consecutive month, despite the current high prices. The latest purchasing follows a six-month halt to the PBoC’s buying of gold from May to October 2024.

Upcoming data

Looking ahead, Wednesday will bring Euro Area consumer confidence and economic sentiment figures for December, followed by the US initial jobless claims figures for the week ending January 4^th. Then moving to Thursday, several US Fed officials are scheduled to give speeches which will be closely watched as the markets try to assess the path forward for interest rates in the coming months.