According to 24K99 news, on Monday (January 6), spot Gold closed slightly lower, but the gold price fluctuated very sharply during the day, with a range of $35.

Analysts point out that although the increase in U.S. Treasury Notes Yield is detrimental to Gold's trend, the weakening of the USD provides support for gold prices, aiding their significant rebound from lows.

During the European trading session, spot Gold briefly reached $2649.44 per ounce but then dropped sharply; during the early New York session, the gold price fell to a low of $2614.28 per ounce; subsequently, the decline in gold prices significantly narrowed.

As of Monday's close, spot Gold slightly decreased by 0.14%, ending at $2635.71 per ounce.

Nitesh Shah, a strategist from WisdomTree Commodity, stated: "The rebound in Bonds yields places pressure on Gold."

The 10-Year U.S. Treasury Notes Yield rose to an eight-month high, diminishing the investment appeal of the non-yielding asset Gold.

The U.S. real yield, which has a negative correlation to gold prices, rose by 4 basis points to 2.26%. Additionally, the U.S. 10-Year Treasury Notes Yield increased by 2.5 basis points to 4.628%.

The USD Index (DXY), which tracks the dollar against a basket of six currencies, fell by 0.60% to 108.27 on Monday, hitting a five-day low of 107.75 during the session.

Shah stated: "Based on the consensus view regarding the depreciation of the USD and the decline in U.S. Bonds yield, gold prices are expected to rise to $3050 per ounce by the end of this year. Moreover, if tensions in the Middle East escalate further, there may be an upside risk to this price level."

He mentioned that the Federal Reserve hinted last month that this year’s rate cuts will be more cautious, and most policymakers are concerned about the potential resurgence of inflation.

U.S. President-elect Trump will be inaugurated on January 20, and the tariffs and protectionist policies he proposed are likely to further exacerbate inflation.

The market is currently most focused on Friday's U.S. Non-Farm Payroll report; in addition, Tuesday's job vacancy data, ADP employment data, and Wednesday's Federal Reserve policy meeting minutes are all focal points for investors.

How to trade gold?

FXStreet Analyst Christian Borjon Valencia pointed out that due to concerns over Trump's agenda, the USD has strengthened, and gold prices are trapped in the range of $2600-$2620 per ounce by the end of 2024. Gold has already broken above the top of this range, opening the door for gold prices to trade near $2630-$2650 per ounce, with the 50-daySimple Moving Average(SMA) hovering around $2652 per ounce.

Valencia stated that if the bulls break through the 50-day moving average, the next key resistance level for Gold prices will be USD 2,700 per ounce, and then it is expected to challenge the peak of USD 2,726 per ounce on December 12. If it breaks above these levels, the next target will be the historical high of USD 2,790 per ounce.

(Spot gold daily chart source: FXStreet)

On the other hand, Valencia added that if sellers pull Gold prices below the 100-day moving average, then Gold prices may test USD 2,500 per ounce, and are expected to extend losses to the 200-day moving average of USD 2,494 per ounce.