On Friday morning (January 3rd) in the Asian market, spot gold fluctuated narrowly and is currently trading at $2658.94 per ounce, holding its overnight gains. Gold prices surged 1.28% on Thursday, hitting a new high of over two weeks at $2660.34 per ounce and closing at $2657.89 per ounce. Driven by safe haven buying, the market assessed the outlook for Federal Reserve interest rates and the potential impact of US President elect Trump's trade tariff proposals.

StoneX analyst Rhona O'Connell said in an email, "I don't see anything in the news driving market trends, but geopolitical forces (international tensions and financial uncertainty, no less than the uncertainty before President elect Trump's inauguration) are supportive

Russia launched a drone attack on Kiev earlier on Wednesday, causing damage to at least two areas, and the Israeli military attacked a suburb of Gaza City.

On January 2nd local time, Ukrainian Energy Minister Kalushenko stated that Russia is using various weapons to attack Ukraine's energy system, and the use of cluster munitions and new weapons has made the repair of the energy system more complex. Galushenko stated that Russia has started using cluster munitions to strike Ukrainian energy facilities. The weapon has a high destructive power, increases the difficulty of repair, and prolongs the time required for facility restoration.

On the evening of January 2nd local time, the Chairman of the Verkhovna Rada (Parliament) of Ukraine, Stefan Chuk, announced that during the air strike on Kiev on January 1st, several committees and business departments of the Verkhovna Rada were affected by the explosion, and some rooms' windows were shattered. On January 1st local time, Mayor Krychko of Kiev, Ukraine, announced that the city was attacked by Russian military attack drones, causing damage and fire to some buildings, resulting in casualties. The Russian side has not yet responded to this.

On January 2nd local time, the acting governor of Kursk Oblast in Russia announced that a village in the region was attacked by Ukrainian missiles that day, causing extensive damage to civilian facilities. There are currently no reports of casualties. On the 2nd, the Ukrainian military announced that it carried out a high-precision strike on a Russian military command post in Kursk Oblast, causing significant losses to the Russian military.

On the morning of January 2nd local time, the Israel Defense Forces launched an airstrike on a refugee camp west of Khan Younis in the southern Gaza Strip. According to preliminary statistics from local medical personnel, the airstrike resulted in 11 deaths, including women and children, and at least 15 injuries. Local media reported that Mahmoud Salah, the head of the police department of the Palestinian Islamic Resistance Movement (Hamas) in Gaza, was killed in an airstrike. At present, Hamas and the Israeli military have not responded to this news.

Israeli media reported that on the evening of January 2nd local time, the Israeli army launched an airstrike on a Hezbollah rocket launch facility in southern Lebanon. At present, the Israeli military has not confirmed any relevant information.

According to a report by The Times of Israel on January 1st local time, Arab officials involved in mediation efforts in the new round of the Israeli Palestinian conflict recently revealed that ceasefire negotiations between Israel and Hamas have been deadlocked in recent days. It is reported that Israel and Hamas are unlikely to reach any agreement before the end of the Biden administration in the United States.

On the evening of January 2nd local time, the Israeli Prime Minister's Office issued a statement stating that Prime Minister Netanyahu has officially approved a professional delegation composed of representatives from the Israeli Intelligence and Special Services Agency (Mossad), the Israeli National Security Agency (Simbel), and the Israeli Defense Forces to travel to the Qatari capital Doha to continue participating in negotiations on the Gaza ceasefire and personnel exchange agreement.

In terms of economic data, Thursday's data confirmed that the US job market remains robust. The number of Americans applying for unemployment benefits fell to an eight month low last week, indicating that the number of layoffs will decrease by the end of 2024. This also helped the US dollar index soar to a two-year high of 109.54 on the first trading day of 2025, closing at 109.24, an increase of about 0.75%. But this did not prevent the rise of gold prices, as the reason for the rise of the US dollar is more due to the return of the 'Trump trade'.

The policies of US President elect Trump are also expected to promote economic growth and may increase price pressures, suppress expectations of interest rate cuts by the Federal Reserve, and support the US dollar; But Trump's tariff threat has also increased market concerns and boosted the safe haven demand for gold.

In 2024, interest rate cuts, central bank buying, and geopolitical tensions drove gold to record highs, with an annual increase of over 27%, the largest since 2010.

Fawad Razaqzada, a market analyst at Forex, said, "The correction or consolidation at the beginning of the year may lay the foundation for another surge in gold prices." He also stated that it is possible for gold prices to reach the target of $3000 per ounce. Closing the 'Trump trade' (a phenomenon characterized by a strong dollar and a strong stock market) could weaken the dollar and boost gold prices

On this trading day, the US December ISM Manufacturing PMI will be released, with a market expectation of 48.4%, up from the previous value of 48.4%; A value below 50 indicates a contraction in the manufacturing industry, and if the data meets or falls short of expectations, it leans towards a bullish gold price.

Traders are still waiting for next week's US job vacancy data, ADP employment report, Federal Reserve December meeting minutes, and US employment report to assess the interest rate outlook for 2025.

From a technical perspective, the MACD golden cross runs, the KDJ golden cross runs, and the Bollinger Bands track closes close to horizontal. On Thursday, the gold price broke through the key resistance of the Bollinger Bands middle track, and the resistance of the high point in the past two weeks has also been broken. Currently, it is testing the resistance near the 55 day moving average 2663.60. If it suddenly breaks upwards, the gold price is expected to further explore the resistance near the Bollinger Bands 2698.17 in the future, and can also refer to the 2700 level.

Daily chart of spot gold

On December 16th, the resistance at the high point was also around the 55 day moving average. Before breaking through this position, there is still a possibility for gold prices to retrace to the support of the Bollinger Bands middle track. The Bollinger Bands middle track 2640.49 has been converted into initial support, and the 5-day moving average support is around 2633.50. The 100 day moving average support is around 2623.32. If it unexpectedly falls below this level, it will weaken the bullish signal.