The price of Gold is attracting significant attention amidst escalating geopolitical tensions. Discussions by U.S. President Joe Biden regarding alternative measures in response to Iran’s nuclear threats have triggered increased interest in safe-haven assets. Coupled with the declining yields on U.S. government bonds, Gold is solidifying its position in the global market.
GOLD
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Gold prices continue to rise as demand for safe-haven assets grows. This bullish sentiment has been fueled by reports that President Biden is exploring alternative strategies to deal with the threat posed by Iran’s nuclear facilities, heightening geopolitical concerns. Such dynamics keep Gold appealing amid global uncertainties.
However, the uptrend in Gold prices is somewhat restrained by the U.S. Dollar Index hovering near multi-year highs around 109.56. Nevertheless, the precious metal gains support from lower U.S. government bond yields, making Gold more attractive despite its lack of yield. This combination of factors sustains the bullish momentum of Gold prices heading into the European trading session.
OIL
Oil prices are maintaining close to the daily high of $71.73, marking a consecutive five-day rise prior to the European trading session. This increase is underpinned by reports from the American Petroleum Institute (API) indicating a reduction in U.S. crude oil stocks by 1.442 million barrels, providing substantial support to oil prices.
Additionally, rising geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict further serve as positive catalysts. Another influencing factor is the anticipated increase in demand from China, which is expected to support further price movement in the oil market. The combination of these sentiments is creating a bullish outlook for the Oil market.
EURUSD
The EURUSD has sharply declined at the start of trading in 2025, dropping 0.8% to around 1.0220, marking its lowest point since November 2022. This decline is fueled by European manufacturing data that fell short of expectations, exacerbating negative sentiment towards the Euro.
German unemployment data for December is set to be released at 15:55 WIB this afternoon, with expectations of an increase to 10,000 claims from the prior 7,000 claims, which indicates rising pressure in the German labor market. Should the data meet or exceed expectations, it could weaken the Euro further, likely impacting the EURUSD pair.
Moreover, dovish remarks from ECB Governing Council member Yannis Stournaras are adding to the downward pressure. Stournaras revealed that the ECB aims to gradually lower interest rates until reaching 2% by year’s end, which may further push the EURUSD down.
GBPUSD
GBPUSD remains under selling pressure as it approaches the European trading session, having plummeted to a new daily low of 1.2352. This decrease is a result of the strengthening U.S. dollar, supported by unemployment claims data showing 211,000 claims, lower than the anticipated 222,000, with previous data revised to 220,000. This data reflects a robust labor market, reinforcing the USD’s position and putting bearish pressure on the GBPUSD pair.
The GBPUSD could experience further declines as expectations mount that the Bank of England (BoE) will reduce interest rates at a quicker pace this year.
USDJPY
The USDJPY opened stable during the Asian trading hours on Friday morning, following a slight increase earlier. The USDJPY continues its recovery following lower-than-expected initial jobless claims data from the U.S. for the week ending December 27.
This supports the view that the Federal Reserve might gradually lower interest rates this year, reinforcing the U.S. dollar. Meanwhile, Japan’s Finance Minister Kato has warned that the country is prepared to intervene to address excessive movements in the yen’s exchange rate, which could influence the USDJPY dynamics in the near term.
NASDAQ
The Nasdaq managed a minor uptick but has yet to alter the selling pressure that has persisted since late 2024, as profit-taking by investors continues to loom overhead.
Weakness in tech giant Apple’s stock negatively impacted the Nasdaq, which fell by 2.6%. Tesla’s 6% drop following a reported decline in annual deliveries for 2024 remains another factor that could pressure the Nasdaq further down.
