Channel Top?

The Fed’s approach to interest rate cuts will be pivotal for gold prices. BMI forecasts
acumulative reduction of 125 basis points (bps), bringing rates to 3.50% by the end of 2025. However, the Fed's decisions will hinge on inflation, labor market, and economic data, introducing uncertainty.

If rate cuts are slower or smaller than expected, gold could face downward pressure due to its lack of yield. Conversely, aggressive cuts could drive investors toward gold as a safe-haven asset.

Strength of the U.S. Dollar
A robust U.S. dollar could spell trouble for gold prices. The dollar’s recent rally, fueled by higher growth expectations, fiscal deficits, and inflationary pressures from trade policies, has reduced gold’s appeal. While BMI expects the dollar to remain strong initially, it could soften as global risk assets perform well.

Geopolitical and Economic Risks
Geopolitical tensions, including the Russia-Ukraine war, Middle Eastern conflicts, and rising trade disputes under Trump’s presidency, will provide some support for gold as a safe haven. However, these risks may not be sufficient to counteract other bearish factors.

On the economic front, BMI forecasts global growth to remain stable at 2.6% in 2024 and 2025, with risks on both sides. Upside factors include potential tax cuts and increased oil production in the U.S., while downside risks stem from escalating tariffs, supply-side inflation, and regional conflicts.

Inflation Dynamics
Inflation, a traditional driver of gold demand, is expected to ease in 2025. While trade-related risks could spur localized inflationary pressures, the overall outlook suggests a slowdown in gold’s appeal as an inflation hedge.

Technically, we might me at the top of the channel, were 3 wave ended at 261.8% extension. For that matter, we might see a 38.2 or 50% correction before the beginning of wave 5.