On December 26, the international gold market continued its upward oscillation trend. COMEX gold closed at $2653.3 per ounce, an increase of 0.68%; domestically, SHFE night session gold closed at 621.40 yuan per gram, up 0.30%. Although gold prices were bolstered by geopolitical tensions, the strong dollar consistently limited their upward potential.
Mixed Economic Data Keeps Dollar Strong
Recent U.S. economic data has been mixed: initial jobless claims were 219,000 last week, below market expectations, but continuing claims rose to 1.91 million, the highest level in three years. Meanwhile, U.S. retail sales grew by 3.8% year-over-year from November 1 to December 24. Encouraged by holiday promotions, last-minute consumer shopping activity increased, and the overall economy showed no clear signs of a downturn.
These data influenced market expectations for Federal Reserve rate cuts, and with thin trading post-Christmas, the dollar index continued to hover near a two-year high. This strong performance added to the resistance for further gold price increases.
Geopolitical Conflicts Support Gold
Meanwhile, tensions between Russia and Ukraine have heightened market risk aversion. Russia's actions against Ukraine's power system further deteriorated the regional situation, providing support for gold prices. As a safe-haven asset, gold has been favored by investors in this backdrop.
Gold Price Outlook
Overall, gold is expected to maintain a volatile but slightly stronger trend in the short term, though its upward potential may be constrained until the dollar weakens. The focus of the market will be on the direction of future Federal Reserve monetary policy and geopolitical changes.
While geopolitical factors support gold prices, investors need to cautiously respond to changes in external environments and monitor the potential impact of the dollar's performance on gold prices.
