Gold (XAU) Daily Forecast: Double-Top Breakout Signals Upside Potential for Gold Prices

Market Overview

Gold prices (XAU/USD) edged lower on Wednesday after reaching a one-and-a-half-week high, trading near the $2,635.63 level. The metal remains resilient amid geopolitical risks, but a strengthening US dollar and rising US Treasury yields are capping further gains.

Investors are closely watching Federal Reserve officials’ speeches for clues on future monetary policy, which could influence gold’s direction in the coming days.

US Dollar Strengthens on Inflation and Growth Expectations

The US dollar’s rally has been fueled by optimism surrounding President-elect Donald Trump’s economic policies, including potential tax cuts and tariffs, which are expected to drive inflation higher.

The CME Group’s FedWatch Tool shows less than a 60% chance of a 25-basis-point rate cut at the Federal Reserve’s December meeting, underscoring the growing skepticism about further monetary easing.

US Treasury bond yields are also climbing, with the 10-year yield touching 4.8%, reflecting expectations of stronger economic growth. This has bolstered the dollar’s strength, applying additional pressure on non-yielding assets like gold.

“Gold remains under pressure as the dollar and bond yields find firm footing ahead of key Fed commentary,” noted a senior market strategist.

Geopolitical Tensions Support Safe-Haven Demand

While a stronger dollar limits upside potential, geopolitical tensions stemming from the Russia-Ukraine conflict continue to support gold’s safe-haven appeal.

Russia’s recent policy updates on nuclear strategy and Ukraine’s missile strikes on Russian military sites have escalated risks, driving investors toward gold for protection.

Despite heightened tensions, officials from both sides have attempted to ease fears of nuclear conflict.

Russian Foreign Minister Sergei Lavrov reaffirmed the country’s commitment to avoiding nuclear war, while the White House stated that its nuclear stance remains unchanged.

Short-Term Forecast

Gold (XAU/USD) remains bullish above $2,625.43, with resistance at $2,642.00. Rising yields and a strong dollar may cap gains, while geopolitical risks support safe-haven demand.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,635.63, up 0.14%, holding above the pivot point at $2,625.43. The 50-day EMA at $2,622.71 supports the bullish outlook, with a recent double-top breakout signaling potential for further upside. Immediate resistance is at $2,642.00, followed by $2,659.11 and $2,678.29.

A sustained move above these levels could open the path for more buying momentum. On the downside, $2,608.07 acts as immediate support, with deeper levels at $2,589.48 and $2,567.06.

Traders should keep an eye on the $2,625.43 pivot—remaining above it maintains a bullish stance, while a break below could trigger sharper selling pressure.