Morning Note: Gold Steadies as Markets Await Fed’s First 2025 Rate Decision

Gold Market Braces for Fed's Next Move

On Monday, gold dipped from highs on a firmer dollar, and investors' attention changed to the first Fed meeting of 2025 for cues on the U.S. interest rate path. With the current trend suggesting a limited downside for gold, demand for haven buying could offer support. Fed policymakers are widely expected to keep interest rates unchanged at the meeting on January 28-29, which will be the first-ever pause in the rate-cutting cycle after it commenced in September.

(Gold Daily Price Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of gold remains bullish, as indicated by higher highs and higher lows within the ascending channel. Recently, the price was rejected from the previous resistance zone, pushing it downward. This movement could be a bullish correction after consecutive weeks of upward momentum. If the price finds support at the rectangular support zone below, it is highly likely to resume its bullish movement.

Trump Unveils $500B Oracle-AI Collaboration

After his inauguration, President Donald Trump announced that the $500 billion joint venture between Oracle and SoftBank is set to establish a network of data centres across the U.S. With a market capitalisation of $521 billion, Oracle is strengthening to capture a significant segment of that fledgling and enormous AI market. The company is aggressively expanding its various cloud computing operations to capitalise on the increasing demand for AI technologies.

(Oracle Shares Daily Price Chart, Source: Markets.com)

From a technical analysis perspective, the overall trend of Oracle's share price remains bullish, as indicated by higher highs and higher lows within the ascending channel. It recently broke through the rectangular zone with significant bullish momentum, accompanied by a gap-up price action. However, the price is approaching the previous resistance zone and channel resistance. If the price breaks through this resistance, it is highly likely to form a higher high, driving the price further upward.

Aussie Hit by Weak China Data, Eyes on Inflation Report

On Monday, the unsatisfactory PMI data out of China did not help with market sentiment, given how intertwined trade is between China and Australia. The Australian dollar, often viewed as the liquid proxy for the Yuan, was particularly affected. In Australia, investors are anticipating the country's quarterly inflation report this week, which could strengthen speculation of a potential cut in the RBA cash rate in February. Moreover, data released last week indicated that Australian business activity remained in growth territory in January, with the services sector in growth and manufacturing stabilising.

(AUD/USD Daily Price Chart, Source: Markets.com)

From a technical analysis perspective, the recent price action has broken out of the descending channel to the upside, retested it, and continues to move upward. It is forming a strong bullish trend, as indicated by higher highs and higher lows. However, the price is approaching a rectangular resistance zone. If the price breaks through this zone, it is highly likely to shift the overall trend from bearish to bullish, pushing the price further upward.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.