Gold prices have maintained a bullish trend, supported by a weakening US dollar and declining Treasury yields. Despite a recent pullback, gold continues to hold solid gains for the week, driven by various economic factors. The US retail sales data showed a sharp decline, putting pressure on the greenback, while the 10-year Treasury yield dropped to 4.472% as investors priced in multiple rate cuts in 2025. Meanwhile, the EUR/USD pair remains supported amid subdued US dollar price action, oscillating in a narrow range below 1.0500 in European trading on Monday.
The US markets remained closed for Presidents' Day, resulting in thin trading activity. This closure offered traders a moment to digest recent economic data and anticipate future movements based on Federal Reserve policy decisions. Industrial production in the US showed improvement, which partially offset the negative sentiment from the disappointing retail sales data. However, the overarching effect of the softening US dollar and weakening Treasury yields continues to bolster gold prices.
Central banks' acquisition of over 1,000 tons of gold in 2024, as reported by the World Gold Council, underscores the ongoing robust demand for the precious metal. This demand was further amplified following Trump's electoral victory, contributing to the upward trend in gold prices seen in recent months. Traders took profits as gold prices fell below $2,900, yet the metal's resilience remains evident. Analysts suggest that if gold breaks above $2,942, further gains are likely.
The EUR/USD pair's stability also plays into the broader narrative of a subdued US dollar. As the pair oscillates within a narrow range, traders are advised to keep an eye on both economic data and Federal Reserve policy announcements for future price direction. GoldPredictors.com emphasizes that its material is intended solely for informational and educational purposes, highlighting the importance of staying informed on market trends.
The weakening of US Treasury yields and a softening dollar have provided crucial support for gold prices, allowing them to maintain an upward trajectory despite intermittent pullbacks. The global economic landscape and central banks' increased purchases signal a sustained interest in gold as an asset class. Investors continue to view gold as a safe haven amid economic uncertainties and fluctuating currency values.