Gold closed at a stable USD 2,048 per ounce on Friday. Despite having gained last week, the price of XAU/USD may fall by 1% in the coming days. The same can happen with silver prices, which are expected to lose about 3% of their value in the market.

More investors are looking to invest in assets with the possibility of a safe return as markets worldwide are on edge about what might happen in the Red Sea. While the conflict in the Middle East remains a concern, gold market analysts believe that inflation data will determine the Fed’s next moves.

The latest report reported that the annual inflation rate in the United States experienced an unexpected increase, reaching 3.4% in December. This result historically exceeded 3.1% and market expectations, putting it at 3.2%. Core inflation, which excludes volatile food and energy components, also remained firm, registering only a slight decrease of 0.1 percentage points, reaching 3.9%.

Simultaneously, the US Dollar Index (DXY), which measures the performance of the US dollar against a basket of other major currencies in the market, rose to 102.41 from an opening of 102.29. The index has experienced one of its best starts to the year in nearly a decade, showing growth of 1% since the start of the year. As is known, the increase in the dollar value usually has negative implications for goods denominated in this currency, as it makes their acquisition more expensive for foreign investors.

In addition, another factor that is impacting the market is the decline in US Treasury bond yields, with the yield on the 10-year bond at 3.95%. At the same time, the yield on the two-year bond fell below 4.14%, while the yield on the 30-year bond rose by two basis points to 4.20%.

XAU/USD technical analysis for today, January 15th

The XAU/USD continues its positive trend. It is very unlikely that there will be any change in this trend for the next few days. If there is any change that generates volatility, the support and resistance levels will be between USD 2,000 and USD 1,980 per ounce. The current scenario and its tensions in the world are a great support for the uptrend to continue. However, a decline in prices might present an ideal opportunity to enter the market and execute call options. Resistance levels for the trend can be identified at USD 2,060, USD 2,075, and USD 2,100.