Gold (XAU) Daily Forecast: Inflation, Tariff Concerns Weigh on Gold Prices

Market Overview

Gold continues its downward trajectory, trading near $2,627 after hitting an intra-day low of $2,621 during the Asian session. The decline is driven by a strong US Dollar rebound, fueled by rising US Treasury bond yields and inflationary concerns tied to President-elect Donald Trump’s proposed tariffs.

Expectations that the Federal Reserve may hold off on further rate cuts have bolstered the dollar’s appeal, further pressuring gold prices.

US Dollar Recovery Dampens Gold’s Appeal

The US Dollar has rebounded from its recent lows, supported by a 2.3% rise in 10-year Treasury bond yields. Investors are increasingly cautious, anticipating that Trump’s tariff proposals targeting BRICS nations could intensify inflationary pressures.

This scenario may restrict the Federal Reserve’s ability to implement further rate cuts, strengthening the dollar’s position and reducing demand for non-yielding assets like gold.

Despite this, markets are pricing in a 65% chance of a Fed rate cut later this month, according to the CME FedWatch Tool. This expectation, alongside persistent geopolitical risks, including tensions in Eastern Europe and the Middle East, has limited gold’s downside, preserving its role as a safe-haven asset.

Global Factors Offer Mixed Signals for Gold

Geopolitical risks remain a crucial driver for gold demand. Ukrainian President Zelenskyy’s peace offer and heightened airstrikes in Syria have fueled uncertainty.

In Asia, China’s manufacturing sector showed resilience, with November’s Caixin Manufacturing PMI climbing to 51.5, indicating potential stimulus measures.

Looking ahead, traders are focused on key US economic data, including the Nonfarm Payrolls (NFP) and ISM Manufacturing PMI reports. These releases will likely shape the Federal Reserve’s monetary policy outlook and influence both the US Dollar and gold prices.

Short-Term Forecast

Gold remains under pressure near $2,627 as the US Dollar strengthens, driven by rising Treasury yields. Key support lies at $2,621; resistance at $2,649.

Gold Prices Forecast: Technical Analysis

Gold is trading at $2,627.89, down 0.85%, as bearish momentum takes hold following a break below its pivot point at $2,635.63. The metal has breached its upward channel, signaling a potential continuation of downside pressure.

Immediate resistance stands at $2,649.58, with additional barriers at $2,666.24 and $2,684.89. On the downside, support is marked at $2,621.06, followed by $2,610.90 and $2,596.99.

The Relative Strength Index (RSI) leans bearish, and the 50-day EMA at $2,645.84 reinforces overhead resistance. Traders are eyeing a double-bottom pattern near $2,610.90, which could signal further declines unless prices reclaim levels above $2,635.63.