From Investing.com: 2025-01-20 03:18:00

Gold prices dropped by 0.45% on Friday due to a stronger USD and Treasury yields, but still held near all-time high of $2,700. Speculation of multiple Fed rate cuts later this year boosted XAU/USD, especially after Fed Governor hinted at further cuts. Traders are pricing in two rate cuts by the end of 2025, creating a favourable environment for gold. XAU/USD may trade within $2,700–$2,720 range today, with markets closed for Martin Luther King Jr. Day. Investors turn to gold as a hedge against downside risks from Trump’s trade policies, expecting potential inflation and trade wars.

The euro lost 0.26% against the USD on Friday as the greenback strengthened, supported by solid real estate and construction data in the U.S. Euro area faces weak economic growth of 1% this year, increasing likelihood of faster ECB rate cuts. Weak economic outlook may lead to three or four rate cuts by the ECB in 2025, compared to one or two by the Fed. EUR/USD may struggle to rebound significantly from recent lows, trading within 1.02500–1.03200 range today with reduced volatility due to markets being closed for Martin Luther King Jr. Day.

The British pound lost 0.62% against the USD on Friday, with U.K. retail sales weaker than expected in December. Weak economic data raises concerns of a potential contraction in Q4, prompting expectations of more BOE rate cuts this year. Traders anticipate at least two 50 bps rate cuts in 2025, with a 76% chance of a 25-bps reduction on 6 February. GBP/USD may trade within 1.21800–1.22200 range today, with most U.S. markets closed for Dr. Martin Luther King Jr. Day, reducing volatility.



Read more at Investing.com: Gold Inches Closer to All-Time High Despite Friday’s Dip