XAUUSD Weekly Analysis 20/01/2025

Fundamental Analysis

Gold prices have been influenced by falling U.S. Treasury yields and a weaker U.S. dollar. However, recent reports about possible tariffs on Mexico and Canada didn’t impact gold much. Investors are closely watching how the new U.S. President, Donald Trump, is shaping policies and their effects on the economy.

Key Factors Driving Gold

1. Post-Election Trends: After Trump’s win in 2024, the U.S. dollar and stock markets rose, while gold prices fell. Investors expected his policies to boost the economy and attract more global capital to the U.S.

2. Trade War Concerns: Memories of the 2018–2019 trade wars have resurfaced. Fears about tariffs and economic slowdowns are pushing gold demand higher. There’s also a shift in storing gold within the U.S., leading to tighter supply and rising costs in London’s gold market.

What’s Next for Gold?

• A weaker U.S. dollar and falling Treasury yields could support gold prices.

• Trade policies, especially any new tariffs, might add uncertainty and increase demand for gold.

• Gold remains a popular choice for safety during economic and geopolitical uncertainty.

Support Levels

1. 2697 (Daily Fair Value Gap - FVG): This level serves as a strong intraday support and potential entry zone for buyers.

2. 2690 (H4 Liquidity): Watch for liquidity sweeps around this level; potential reversal signs may emerge.

3. 2678 (Daily FVG): A deeper support level; buyers may defend this area aggressively if tested.

Trade Plan

Long Opportunities:

1. Look for bullish setups around 2697, 2690 or 2678 with confirmation (e.g., reversal candles, bullish divergence).

2. Aim for targets at 2717, 2724, and 2749, scaling out at key levels.

Targets

1. 2717: Mid-range target for intra-week bullish continuation.

2. 2724: Top of the previous week's range; could act as resistance or a liquidity pool.

3. 2749: Extended target; bullish momentum may need additional catalysts to breach this level.

Short Opportunities:

1. Watch for rejection patterns or bearish reversal signs near 2726.

2. Potential pullback targets include 2697 and 2678.

Key Considerations

1. Equal Highs at 2726:

   1. The equal highs on the daily time frame signal a potential liquidity grab.

   2. Sellers may enter aggressively if price reaches this level, aiming to push it lower. Be cautious with long positions near this zone.

2. Market Behavior:

   1. A liquidity sweep above 2726 could trigger selling pressure, leading to a pullback toward the support levels mentioned.

   2. If price breaks and sustains above 2726, it increases the probability of reaching 2749.

1. Risk Management:

   1. Use proper risk management according to your equity

   2. Monitor momentum carefully; a break below 2656 invalidates the bullish bias.

Technical analysis

Momentum and Market Structure

1. Current Momentum: Bullish

2. Previous Week: Bullish

3. Range: 2656 - 2724

4. Expectations: A bullish move is anticipated within the range.