Insights 
VT 
Key Points:
- Gold price climbs above $4,450 in Tuesday’s early Asian session.
- Geopolitical flashpoints and the Fed’s monetary easing cycle support the Gold price.
Spot gold trades above the $4,450 mark on Monday, posting strong daily gains amid broad US dollar weakness. The metal was supported early in the session by ongoing global tensions, before extending its advance following softer-than-expected US economic data.
Markets reacted on Saturday after reports emerged that US President Donald Trump authorised an operation in Venezuela that led to the capture of President Nicolás Maduro and his wife, who were taken to the US to face charges including narco-terrorism. The development fuelled global uncertainty and lifted demand for safe-haven metal as caution prevailed.
US ISM PMI Data Weakens The Dollar
Early in the US session, the dollar came under pressure after the December ISM Manufacturing PMI missed expectations. The index fell to 47.9, below the forecast 48.3 and November’s 48.2. While the Employment Index edged up to 44.9 from 44, the Prices Paid Index, a gauge of inflation, was unchanged at 58.5.
Technical Analysis
Gold has rebounded strongly from the $4,350 support level and is now moving towards the previous all-time high at $4,550. The moving averages on the chart are beginning to align with a bullish trend, signalling strong upward momentum in gold.
The MACD signal line has also turned positive, trading above the 50 level, while the histogram is showing solid bullish bars. With multiple indicators aligned for long opportunities, traders should nevertheless remain cautious ahead of Friday’s US Non Farm Payrolls (NFP) release, as stronger-than-expected data could support the US dollar and alter the current trend.
Cautious Outlook as Non Farm Payroll Awaits
Attention now turns to Friday’s US December jobs report. The economy is expected to add 55,000 jobs, with the unemployment rate seen edging down to 4.5%. A stronger-than-expected reading could lend support to the US dollar and weigh on dollar-priced commodities in the near term.
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