Gold (XAU) Daily Forecast: Gold Eyes $2,678 Resistance in Upward Channel

Market Overview

Gold prices (XAU/USD) climbed to a four-day high of $2,664 on Friday, continuing their upward momentum fueled by a mix of geopolitical uncertainty and market turbulence. Investors are increasingly turning to safe-haven assets like gold as fears of trade wars and ongoing economic challenges persist.

The rally was further supported by expectations of another Federal Reserve interest rate cut in December and a notable decline in U.S. Treasury yields.

Dollar Weakness Bolsters Gold’s Appeal

The U.S. dollar hovered near a two-week low as markets priced in a 70% probability of a Fed rate cut at the upcoming policy meeting. Despite minor gains earlier in the week, the dollar’s ongoing struggles have enhanced gold’s appeal, as a weaker greenback makes the metal more attractive to international buyers.

Minutes from the Federal Open Market Committee’s (FOMC) November meeting highlighted internal divisions on future rate cuts.

While some members support further easing, recent data, including the U.S. Personal Consumption Expenditure (PCE) Price Index, shows inflation stalling, raising doubts about the Fed’s next moves. This uncertainty has capped the dollar’s recovery, indirectly boosting gold prices.

Inflation Data Shapes Market Sentiment

The October PCE Price Index revealed slowing inflation, prompting speculation that the Fed may adopt a cautious approach to further rate reductions.

If the central bank slows its pace, it could stabilize the dollar and temper gold’s momentum in the short term.

However, for now, the metal remains well-supported as investors hedge against potential inflationary pressures and policy uncertainties.

Short-Term Forecast

Gold prices (XAU/USD) sustain bullish momentum above $2,650, targeting resistance at $2,678.32. Fed rate cut hopes and dollar weakness drive short-term gains. Support holds at $2,629.30.

Gold Prices Forecast: Technical Analysis

Gold prices (XAU/USD) are trading at $2,662.82, up 0.96%, as the metal maintains its bullish momentum within an upward channel. Holding above the pivot point at $2,650.80 underscores buyers’ control, with immediate resistance at $2,678.32 and further targets at $2,698.38 and $2,720.74.

The 50-day EMA at $2,644.55 is providing near-term support, while the 200-day EMA at $2,649.97 reinforces the bullish trend.

On the downside, critical support lies at $2,629.30, followed by $2,607.51 and $2,589.60. The RSI remains elevated, signaling room for further upside unless overbought levels are reached.

Sustained movement above $2,650 keeps the focus on resistance levels, but a break below could invite sharp selling pressure.