Gold News: Modest Post-Holiday Gains Offset by Worst Monthly Decline Since 2023

Gold Set for Worst Monthly Decline in Over a Year

Gold prices edged higher on Friday, supported by a weaker U.S. dollar and persistent geopolitical risks. Despite the gains, the metal remains on track for its sharpest monthly decline since September 2023. Trading during a shortened post-holiday session, spot gold is seeing its third consecutive day of increases.

Gold found strong support earlier this week near $2,605.31, close to the key retracement zone of $2,629.13 to $2,607.35. On the technical front, immediate resistance is seen at $2,663.51, a 50% retracement level, followed by the 50-day moving average at $2,669.53. A sustained break above these levels could pave the way for a test of the Fibonacci resistance at $2,693.40.

At 12:49 GMT, XAU/USD is trading $2659.59, up $21.99 or +0.83%.

Weaker Dollar and Geopolitical Risks Support Gold

The dollar index fell to its lowest point since November 12, offering temporary support for gold. However, the dollar is still poised to end November 2% higher, bolstered by expectations of prolonged higher U.S. interest rates following Donald Trump’s election victory. Gold’s appeal as a non-yielding asset tends to wane in a high-interest-rate environment, contributing to its 3% decline so far this month.

Geopolitical factors remain a mixed bag for the safe-haven asset. While ceasefire talks in the Middle East have slightly reduced concerns, ongoing tensions in Russia-Ukraine continue to provide a floor for gold prices. On Thursday, Russia launched a significant attack on Ukraine’s energy infrastructure, keeping geopolitical uncertainty elevated.

Investors Look Ahead to U.S. Economic Data

Market participants are closely monitoring U.S. economic releases next week, including the highly anticipated jobs report, for clues on the Federal Reserve’s monetary policy outlook. These indicators could influence gold prices by shaping expectations for the Fed’s next rate move.

Gold Market Forecast

Gold is likely to remain range-bound in the near term, with resistance at $2,669.53 and support at $2,605.31. A weaker dollar or escalation in geopolitical tensions could push prices higher, but the strong dollar and rising interest rate expectations may limit upside potential. The outlook for gold remains cautiously bearish as traders weigh economic data and policy signals against geopolitical risks.

More Information in our Economic Calendar.