On Thursday (January 2), during the Asian market, spot Gold experienced a rapid short-term increase, with the current price approaching $2,635 per ounce, up $10 during the day. Analysts state that a terrorist attack in the USA has sparked risk-averse buying that is pushing Gold prices up. Additionally, the ceasefire negotiations in Gaza have once again fallen into a deadlock, further dampening risk appetite.
(Source: 24K99) 15-minute chart for spot gold.
FXStreet Analyst Lallalit Srijandorn pointed out that geopolitical risks, central bank buying, and safe-haven funds may push Gold prices higher.
According to USA officials, in the early hours of January 1, a man deliberately drove a pickup truck into a crowd of revelers on Bourbon Street in New Orleans, resulting in at least 15 deaths and dozens of injuries.
The USA Federal Bureau of Investigation (FBI) issued a statement saying that an "Islamic State" flag was found inside the pickup truck, and they are investigating the suspect's background and potential connections to terrorist organizations; this incident is being treated as a terrorist attack case.
USA President Biden expressed that he feels "angry and disappointed" about the Louisiana car attack incident.
USA President-elect Donald Trump posted on his Social Media platform Truth Social to condemn the attack. Trump said: "Our hearts are with all the innocent victims and their families. The Trump administration will fully support the investigation by the City of New Orleans and help recover from this pure evil act!"
On January 1, local time, an electric vehicle explosion occurred in front of the Trump Hotel located in Las Vegas, Nevada, USA, resulting in one death and seven injuries. The Las Vegas Metropolitan Police Department stated that the police are investigating the explosion incident outside the Las Vegas Trump International Hotel and have initially classified it as a potential criminal case or terrorist attack.
In addition, the latest news has emerged regarding the ceasefire negotiations in the Middle East. According to the Israeli Times, as of January 1, Arab officials mediating in the latest round of the Israeli-Palestinian conflict recently revealed that ceasefire negotiations between Israel and Hamas have stalled in recent days. It was reported that before the end of the Biden administration in the USA, it is unlikely that any agreement will be reached between Israel and Hamas.
Reports indicate that mediators had initially considered a 60-day ceasefire agreement, during which Hamas would exchange 30 detained individuals for a batch of Palestinians held by Israel, and allow more humanitarian aid to enter the Gaza Strip, but the parties have recently encountered differences again. Israel demands that the 30 detainees exchanged by Hamas should not include the bodies of deceased individuals, and Israel is also unwilling to release some Palestinians that Hamas requests. Additionally, Hamas once again proposed that Israel commit to a permanent ceasefire, but this was rejected by Israel.
Focus on important data from the USA.
Srijandorn stated that expectations for the Federal Reserve to slow down the pace of interest rate cuts may limit the upside potential for Gold. Traders are awaiting potential catalysts that could impact the Federal Reserve's rate outlook for this year.
In December of last year, Federal Reserve Chairman Powell hinted at a cautious attitude towards further rate cuts after announcing a 25 basis point rate cut. In turn, this may provide some support for the dollar and weaken the price of Gold priced in dollars.
Srijandorn noted that the data on initial weekly unemployment claims to be released on Thursday may provide some clues about the condition of the labor market in the USA. On Friday, the focus will be on the Manufacturing Purchasing Managers' Index (PMI) for December released by S&P Global.
Srijandorn added that on the other hand, uncertainty surrounding the policies of the incoming President Trump of the USA may boost Gold prices. Moreover, geopolitical tensions in the Middle East and the ongoing conflict between Russia and Ukraine are expected to remain high this year, which may encourage the flow of safe-haven funds, benefiting Gold prices.
The increase in demand for Gold by Global central banks may drive up Gold prices. A survey by the World Gold Council indicates that major central banks may purchase more Gold in the next 12 months. This should further boost Gold demand.
At 09:35 Peking time, spot Gold is quoted at $2634.16 per ounce.
