Gold prices continued to break records, opening this week’s trading on a notable increase of 2%, scaling a new record high of $5111 per ounce.
Gold is currently trading near the first weekly resistance level at $5103, where it coincides with the bullish channel’s upper line. It should be noted that exceeding this level could push the yellow metal towards further record highs near the second weekly resistance level at $5218.
If the yellow metal falls below the bullish channel’s upper line, it may test the weekly pivot point at $4875. If the price breaks the aforesaid pivot point, it may begin to form a downward corrective wave that could extend towards support levels at $4759 then $4530.
On the economic front, headlining this week’s slate of events will likely be the Fed’s latest interest rate decision on Wednesday. The Fed is widely expected to keep rates unchanged at a range of 3.5% to 3.75%, according to CME FedWatch Tool.
Investors will also scrutinize comments from Fed Chair Jerome Powell during the press conference following the Fed decision, where the focus will be on his tone to see whether he will move forward with rate cuts over the course of 2026.
January’s Fed meeting comes as President Trump has frequently called for aggressive and quick rate cuts to boost the economy and has badgered officials for not doing so.
Market expectations now point to Rick Rieder, CEO of BlackRock, as the leading candidate to replace Jerome Powell, surpassing Kevin Warsh, former Federal Reserve governor, in the race for the top Fed position.
In a different context, markets are awaiting the U.S. producer price index for November. Analysts expect annual inflation to fall to around 2.9%, down from the previous reading of 3%.
In terms of economic events, U.S. President Donald Trump announced on Saturday that he would impose 100% tariffs on Canada if it proceeded with a trade agreement with China.
Carney, said Canada has “no intention” of going after a free trade deal with China. He added that Ottawa respects its commitments made under a separate pact with the U.S. and Mexico and would inform both of such an agreement before pursuing it.
Finally, the probability of a repeat U.S. government shutdown by January 31, 2026, has surged to 75%, according to Polymarket estimates, after Democratic senators threatened to block a federal funding bill that includes funding for the Department of Homeland Security.