XAUUSD Weekly Analysis 25/01/2025

Fundamental Analysis
Gold prices are benefiting from falling U.S. Treasury yields and a weaker dollar, reinforcing its safe-haven appeal. While recent tariff concerns involving Mexico and Canada have had little impact, investor focus remains on U.S. President Donald Trump’s economic policies.

Key Drivers of Gold Prices

1. Post-Election Sentiment:
   Following Trump’s 2024 victory, optimism about pro-growth policies initially boosted the dollar and stock markets, pressuring gold. However, concerns about longer-term policy impacts are now supporting gold’s rebound.

2. Trade War Memories:
   The specter of past trade wars has resurfaced, reviving fears of economic slowdowns. Gold demand is climbing as investors hedge against potential tariffs and geopolitical risks. Additionally, shifts in gold storage to the U.S. are tightening global supply chains, pushing up costs in key markets like London.

Outlook for Gold

• A weaker dollar and declining Treasury yields are likely to sustain bullish momentum.

• Potential tariff announcements or unexpected policy shifts could inject volatility, further increasing demand for gold.

• Amid uncertainty, gold continues to serve as a reliable hedge for both geopolitical and economic risks.

Gold’s role as a safe-haven asset remains critical, making it a top choice for investors navigating an unpredictable market landscap

2. Key Support Levels

• $2,735 (H4 Liquidity):

  • Significant liquidity resting at this level.

  • Watch for liquidity sweeps and reversal signs, such as bullish engulfing or pin bars.

• $2,730 (H4 Fair Value Gap):

  • FVG on the 4-hour chart may act as a magnet for price before a potential reversal.

• $2,724 (Weekly Fair Value Gap):

  • A key zone to monitor for long opportunities; strong confluence with higher timeframe demand.

• $2,714 (Daily Fair Value Gap):

  • An additional layer of support; watch for bullish reactions in this zone.

3. Long Opportunities

• Look for bullish setups around:

  • $2,735: Price may sweep liquidity here before reversing.

  • $2,730 or $2,724: Seek confirmation via reversal candles or bullish divergence.

• Targets:

  • Primary Target: $2,790 (all-time high).

  • Extended Target: $2,822 (measured move and psychological resistance).

• Invalidation: If price closes below $2,714 on a 4-hour timeframe, reconsider bullish bias.

4. Short Opportunities

• Watch for rejection patterns above:

  • $2,790 (All-Time High): A potential liquidity grab may occur here, signaling exhaustion.

  • Look for bearish reversal signs (e.g., bearish engulfing, shooting star) on the 4-hour or daily chart.

• Targets:

  • $2,735 or $2,730: As immediate pullback zones.

5. Summary

• The bias remains bullish within the $2,689–$2,786 range.

• Long entries are favorable around support levels ($2,735, $2,730, $2,724) with confirmation.

• Short opportunities may arise near or above $2,790 if signs of exhaustion emerge.

• Use your strict money management rules to manage risks effectively.

Technical analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish.

• Previous Week's Performance: Bullish, with the price continuing its climb within a strong uptrend.

• Range: $2,689–$2,786.

• Expectations: Anticipating a bullish continuation within the range, targeting new highs.