XAU – Gold Continues to Be Supported by Safe-Haven Buying, Focus on U.S. CPI and Iran Situation

The Chicago Mercantile Exchange (CME) announced significant adjustments to the margin calculation method for gold, silver, platinum, and palladium futures contracts. Under the new rules, margin requirements will change from a fixed USD amount to a percentage of the contract's notional value. After the adjustment, the outright rates for some gold contracts will be approximately 5% of their notional value, and for silver contracts, approximately 9%. This change aims to make margin levels more closely reflect actual market volatility. The new standards are scheduled to take effect after the market closes on January 13th.

Gold surged on Monday, surpassing the $4,600 and reaching a record high of $4,630. The U.S. Department of Justice's threat to file criminal charges against Powell regarding his congressional testimony on the $2.5 billion renovation project of the Federal Reserve's Washington headquarters has fueled market concerns about the Fed's independence. Powell dismissed the move as a "pretext" for the White House to pressure for interest rate cuts, even though his term ends in May. This event not only increased the risk of political interference in the Federal Reserve but also dampened market confidence in the dollar, causing the dollar index to fall on Monday, ending a four-day winning streak last week.

Escalating geopolitical tensions also fueled the rise in gold prices. The Trump administration is weighing its response to the crackdown on protests in Iran, seen as the most serious challenge to the Iranian regime since the 1979 Islamic Revolution, while Iran says it will maintain communication channels with the United States. Furthermore, Trump's previous ouster of Venezuelan President Nemadouro and his proposal to acquire Greenland have created a highly unstable global environment, prompting funds to flow into safe-haven assets such as gold.

Regarding the Federal Reserve's policy path, although the Fed is expected to keep interest rates unchanged at its January 27-28 meeting, the market still anticipates two more rate cuts later this year. (According to CME FedWatch) Tool Watch: The probability of the Fed cutting rates by 25 basis points in January is 5.0%, and the probability of keeping rates unchanged is 95.0%. By March, the probability of a cumulative 25 basis point rate cut is 26.0%, the probability of keeping rates unchanged is 72.8%, and the probability of a cumulative 50 basis point rate cut is 1.2%. The market will currently focus on the U.S. CPI data released this Tuesday, followed by PPI and retail sales data on Wednesday. Although the US December employment data released last Friday was lower than expected, it was not enough to change the expectation that the Fed will only cut rates twice.

Technically speaking, after reaching a record high of $4550 at the end of last year, the price fell to $4274, barely holding onto the upward trend line that had lasted for nearly two months, undergoing a technical pullback. Last week, the upward trend resumed, and on Monday, it refreshed the record high again. Based on this, the target for the extended upward movement is expected to reach $4826. Furthermore, the price is currently in a... A small triangle consolidation range, with upper and lower bounds at $4604 and $4345 respectively, typically indicates market momentum accumulation. A breakout could trigger a trend-driven move. Measured breakout levels are $4924 and $4074 respectively. Another pattern is a medium-term parallel channel with upper and lower bounds at $4775 and $3874, providing a broader trading framework. Moving averages are in a bullish alignment, with the nine-week moving average providing support at $4345 and the 25-day moving average at a significant level at $4405. Short-term support levels are estimated at $4565 and $4545, with the next level at $4510. Stronger support levels are estimated at $4478 and $4424. Resistance levels are initially seen at $4619 and $4652, followed by $4674 and $4695, before potentially reaching $4750.

Gold, January 13th:

Forecast early trading range: $4565 - 4619
Resistance 4652 - 4674 - 4695 - 4750
Support 4545 - 4510 - 4478 - 4424

SPDR Gold Trust Gold Holdings:
January 2 - 1,065.13 tons
January 5 - 1,065.13 tons
January 6 - 1,067.13 tons
January 7 - 1,067.13 tons
January 8 - 1,067.13 tons
January 9 - 1,064.56 tons
January 12 - 1,070.80 tons

12/1 AM London Gold Fix: $4587.7
12/1 PM London Gold Fix: $4612.95 

Any questions? contact our professional analysis team