Gold (XAUUSD) Price Forecast: Gold Analysis Turns to CPI as Safe-Haven Demand Builds

LONDON (January 11) Gold (XAUUSD) finished higher last week as investors shrugged off the potential negative impact of a major commodity fund rebalancing and instead chose to focus on Fed rate cuts and geopolitical uncertainty.

Last week, XAUUSD settled at $2,509.66, up $177.60, or 4.10%.

Venezuelan Crisis Sparks Initial Rally

The week started with a bullish catalyst and heightened demand after U.S. troops captured Venezuelan president Nicolás Maduro, interjecting uncertainty into global markets and boosting traditional safe-haven buying in bullion.

Rebalancing Pressure Drives Sharp Reversal

As the rally threatened to challenge the record high at $2,550.15, sellers re-emerged, driving prices sharply lower as a scheduled commodity index rebalancing from January 9 to January 15 added pressure to the market, driving it down to $2,349.35.

Jobs Data Fuels Recovery

XAUUSD rebounded from that selling pressure with the help of the U.S. Non-Farm Payrolls report, which showed weaker job gains and reinforced the narrative for a more accommodative Fed this year.

It should be noted that gold diverged from the U.S. Dollar, with both posting gains and XAUUSD performing a little better. This added to the volatility as investors weighed the trade-off between high-yield investments and safe-haven assets.

FXStreet