Gold prices (XAU/USD) remain steady above $2,700. Traders are monitoring mixed market signals. They are also waiting for President-elect Donald Trump's inaugural speech. The precious metal struggles to capitalize on its recent intraday bounce. A risk-on sentiment in equity markets acts as a headwind for safe-haven demand. However, easing US inflation and expectations of Federal Reserve rate cuts in 2025 continue to support gold prices. The market remains cautious as US banks are closed for Martin Luther King Jr. Day, limiting directional bets during this uncertain period.

Fundamentals: Gold Balances Between Risks and Opportunities

The fundamental backdrop for gold reflects both supportive and limiting factors. Signs of abating inflation in the US have strengthened speculation of Federal Reserve rate cuts. The Fed may cut interest rates twice in 2025. Recent US inflation data confirmed easing pressures. The data includes the Producer Price Index (PPI) and Consumer Price Index (CPI). This prompted renewed selling of the US Dollar. This Dollar weakness supports non-yielding assets like gold.

At the same time, concerns about President-elect Donald Trump's potential trade tariffs and disruptive policies add uncertainty. Hopes of diplomatic agreements, such as relaxing curbs on Russia to resolve the Ukraine conflict, contribute to a positive risk tone. Meanwhile, traders avoid placing aggressive bets and await further clarity from Trump's inaugural address. This mixed scenario underscores the need for cautious trading during this period of volatility.

Technical Analysis: Bullish Trend Amid Uncertainty

The chart below highlights an ascending channel in gold prices, showcasing a consistent uptrend since early 2023. Gold remains within this channel, with the current price near $2,711, approaching key resistance at $2,720. Historical movements within the channel indicate the potential for further gains if the price breaks above $2,720. A breakout above $2,790 could confirm continued bullish momentum, potentially targeting $3,000.

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However, failure to break above resistance levels might lead to a pullback toward lower channel support around $2,650. Traders should watch for clear breakouts or signs of consolidation near resistance before making directional trades. This ascending channel provides a strong technical framework for identifying future price movements.

The chart below provides an example of trading gold during volatile conditions. This trade was delivered to Gold Predictors premium members using WhatsApp. A trade executed at $2,672 with a stop loss of $2,642 and a profit target of $2,719 demonstrates disciplined risk management. This trade achieved a $47 profit per ounce, capitalizing on the short-term price rebound.

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This example emphasizes the importance of predefined stop losses and realistic profit targets based on technical levels. Traders navigating volatility should monitor key support and resistance zones and avoid over-leveraging. They should enter trades only after confirming price signals like pullbacks or breakouts. Combining these strategies with disciplined execution can help traders manage risk while benefiting from market movements.

Conclusion: Balancing Risk and Opportunity

Gold prices remain strong within a bullish framework, but traders must remain cautious amid market volatility and fundamental uncertainty. A break above $2,720 could pave the way for further gains. A failure to hold above this level may trigger pullbacks. Easing inflation, Dollar weakness, and geopolitical risks create mixed influences. Gold remains a key asset for investors seeking safety and opportunity. Disciplined trading strategies are essential for navigating the current market environment.

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