Gold Prices Decline as Market Awaits Key Events
In Asian morning trading on Monday, January 20, spot gold experienced a sharp decline, dropping to an intraday low of $2,690.96 per ounce. This marks a continuation of the retreat seen in the previous session, as gold prices closed at $2,702.27 per ounce on Friday, down $12.08 or 0.45%.
The decline in gold prices at the end of last week was attributed to a lack of market catalysts, according to FXStreet analyst Christian Borjon Valencia. Market participants are focused on upcoming events, including the inauguration of U.S. President-elect Donald Trump. Speculation about Trump's potential trade tariffs and the impact on inflation and trade wars has fueled uncertainty, which could enhance gold's appeal as a safe-haven asset.
David Meger, Head of Metals Trading at High Ridge, emphasized that uncertainty surrounding Trump's policies continues to support gold. Similarly, Zain Vawda, a market analyst at OANDA MarketPulse, noted that the potential economic impact of trade policies under the new administration is expected to sustain safe-haven demand for gold.
Despite the recent decline, spot gold recorded a 0.47% gain last week, marking its third consecutive week of increases. Prices reached a high of $2,724.81 per ounce during that period.
Key Levels and Technical Outlook
Looking ahead, Valencia suggests that gold could test the January 13 volatility low of $2,656 per ounce if it fails to hold above the $2,700 mark. A further retracement might bring the price down to the 50-day and 100-day simple moving average convergence zone, around $2,639-$2,642 per ounce.
On the upside, if gold regains the $2,700 level, prices could rebound toward the December 12 high of $2,726 per ounce. Breaking above this level may set the stage for a move toward $2,750 per ounce, with the all-time high of $2,790 per ounce as the next major target.
As of 08:03 GMT, spot gold was trading at $2,694.70 per ounce, reflecting continued volatility as market participants monitor key developments, including the U.S. presidential inauguration, jobless claims, and the preliminary Purchasing Managers' Index (PMI).
