Gold (XAU) Daily Forecast: Fed Uncertainty and $2,650 Resistance in Focus

Market Overview

Gold (XAU/USD) advanced on Wednesday, rising from a one-week low near $2,600 to reach an intraday high of $2,645. The increase was largely influenced by a weakening US dollar and uncertainty surrounding Federal Reserve policy decisions.

Despite robust US economic data, including a rise in the Consumer Confidence Index to 111.7 in November—its highest since July 2023—the dollar continued to face downward pressure, making gold more attractive to investors.

Federal Reserve minutes revealed divisions among policymakers regarding potential rate cuts, adding to market unpredictability.

The CME Group’s FedWatch Tool indicates a 63% probability of a 0.25% rate cut at the December meeting. Investors now await key US inflation data and Q3 GDP figures for further direction.

Geopolitical Dynamics Elevate Gold Demand

Gold prices are also responding to heightened geopolitical tensions. Escalations in the Russia-Ukraine conflict, including reported drone attacks and advanced missile deployments, have increased demand for gold as a hedge against risk.

Furthermore, US President-elect Donald Trump’s proposed tariffs on imports from Canada, Mexico, and China have introduced additional uncertainty to global markets. This uncertainty is encouraging a broader shift to gold among investors seeking to protect their portfolios.

Outlook: Key Drivers for Gold Prices

The combination of dollar weakness, Fed policy uncertainty, and geopolitical risks continues to underpin gold prices. However, resistance near $2,645 suggests that further gains could be limited without a clear catalyst.

Traders are watching the release of the Personal Consumption Expenditure (PCE) Price Index and preliminary Q3 GDP data for clues about the Fed’s policy direction.

With a volatile macroeconomic backdrop and persistent geopolitical tensions, gold remains a favored choice for risk-averse investors. The metal’s ability to hold above critical levels highlights its resilience as a safe-haven asset in uncertain times.

Short-Term Forecast

Gold Prices Forecast: Technical Analysis

Gold is trading at $2,643.75, up 0.41%, showing a modest rebound above the $2,629 pivot point. Immediate support is firm at $2,608, near the 61.8% Fibonacci retracement, which has played a key role in stabilizing prices.

The next resistance sits at $2,650, closely aligned with the 200 EMA, making it a critical level to watch. A break above this could signal further bullish momentum toward $2,678.56.

However, failure to hold above $2,629 may lead to a pullback, with targets at $2,608 and $2,589.