Why did gold prices rise last week? Will this rise continue?

Gold ended last week on a clear rise, trying to attract more traders and those wishing to buy to enhance savings and safe havens without a clear negative impact, and hoping for greater momentum for the price of the precious metal, according to what the American FX Empire platform reported.

Gold prices are rising for two reasons

Metal prices rose despite everything, reaching $2,689.38 per ounce, rising $49.65, or 1.88%, to the highest close for the metal in four weeks.
The rise emerged against the backdrop of a stronger US dollar and higher Treasury bond yields, highlighting the metal’s appeal as a permanent safe haven.
The $2,663.51 level remains the critical level for gold’s next move at a time when traders are closely monitoring this area as the yellow metal enters a critical turn.
Read also: Why is gold considered a good safe haven so far despite its high prices?

Gold is going against the grain

Rising gold prices defied usual market behavior with the 10-year US Treasury yield rising to 4.79% and the dollar reaching multi-year highs.
Such conditions usually put pressure on gold due to higher opportunity costs and less favorable prices for non-dollar buyers.
But growing concerns about US financial health, deficits and inflation have reignited demand for gold as a safe haven.

Global concerns about the American financial situation

Brian Lundin of Gold Newsletter expressed this sentiment, saying: “The strength of the dollar, rising Treasury yields and the rising price of gold are all evidence of global concerns about the US financial situation.”
Central banks have accelerated gold purchases and individual investors are following suit, wary of inflation risks and signs that the Fed may have difficulty controlling the bond market.
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Is inflation the next catalyst for gold prices?

The December jobs report showed the labor market was strong with 256,000 new jobs added and the unemployment rate fell to 4.1%. This strong growth has fueled concerns about persistent inflation, complicating the Fed’s strategy to cut interest rates in 2025.

Possible jump in gold prices

Attention is now turning to January 15, when the Consumer Price Index data will provide a clearer view of inflation trends. Higher-than-expected data may shake the financial markets, leading to a rise in Treasury bond yields and possibly raising the value of gold as a hedge against inflation.

What are the expected gold prices?

The weekly trading range between $2,790.17 and $2,536.85 highlights critical gold levels and a sustained move above $2,663.51 could push prices towards $2,726.30, the December high, and even challenge the all-time high of $2,790.17.
On the downside, a drop below $2,663.51 could test the $2,631.04 level and deeper declines could target key support areas at $2,571.68 and $2,533.76, with $2,387.23 potentially being the longer-term lower bound.

Gold price scenarios in 2025

On the upside, a rise in CPI could exacerbate concerns about inflation, boosting demand for gold and pushing prices towards $2,726.30 or even an all-time high of $2,790.17. Continued financial concerns and geopolitical uncertainty will fuel this rally.
In the bearish scenario, weaker CPI data may ease inflation fears, leading to higher US Treasury revenues and weighing on gold. This scenario may push prices towards $2,631.04 per ounce.