Gold (XAU) Daily Forecast: Can Gold Reclaim $2,650 or Is a Bearish Move Imminent?

Market Overview

Gold prices (XAU/USD) slipped further, hitting an intra-day low of $2,643.61 as traders grapple with a stronger U.S. dollar and shifting Federal Reserve expectations. The U.S. dollar has surged to its highest point since August 8, buoyed by diminishing hopes for a significant rate cut from the Fed in November.

Traders now expect a modest 25 basis point cut, a shift from previous hopes of more aggressive easing. Rising U.S. Treasury bond yields are also supporting the dollar, creating headwinds for gold, a non-yielding asset.

Minneapolis Fed President Neel Kashkari added to the cautious sentiment, noting that while monetary policy remains restrictive, the strong labor market could lead to modest cuts. Fed Governor Christopher Waller echoed this, emphasizing that the economy is performing better than expected, suggesting a slower pace of rate cuts.

Chinese Data Disappoints, Adding to Gold’s Downward Pressure

Further weighing on gold is the weak economic data from China, the world’s largest consumer of the precious metal. Inflation figures have failed to inspire confidence, and the lack of a detailed fiscal stimulus plan has disappointed investors.

This has dampened gold’s appeal, especially as positive risk sentiment grows and traders shift focus toward other assets.

China’s economic weakness is evident as gold prices face selling pressure, particularly with the absence of robust fiscal measures. The market had anticipated stronger actions from Beijing to stimulate growth, which would have bolstered gold demand.

Geopolitical Tensions Provide Some Support

Despite these headwinds, geopolitical tensions in the Middle East are providing some support to gold prices. Israel’s escalating conflict with Hezbollah following a drone attack has raised concerns about broader regional instability.

Fears of further military action, potentially involving Iran, are keeping safe-haven demand for gold intact.

While these geopolitical risks may prevent a deeper sell-off, gold remains under pressure from the stronger U.S. dollar and tepid Chinese economic performance.

Traders are also looking ahead to key U.S. economic data, such as the Empire State Manufacturing Index, which could provide further insights into short-term trading opportunities for XAU/USD.

Short-Term Forecast

Gold prices are hovering near $2,647.26 support. A break below this could trigger a bearish trend, while a move above may lead to a test of $2,656.86 resistance.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,643.61, down 0.20% today. Prices are hovering just below the pivot point of $2,647.26, now acting as key support. A breakout above this level could ignite a fresh bullish move, targeting the next resistance levels at $2,656.86 and $2,665.47.

However, the formation of a bearish engulfing candle is signalling potential downside risk. Immediate support lies at $2,636.12, with deeper support levels at $2,628.21 and $2,619.18.

The 50-day EMA at $2,646.95 is closely watched as a dynamic resistance, while the 200-day EMA at $2,640.05 offers underlying support. Traders should monitor a break below $2,647.26, as this could confirm a bearish bias.