Gold (XAU) Daily Forecast: Risk-On Sentiment Pressures Prices Below $2,660

Market Overview

Gold prices (XAU/USD) declined to $2,659 on Monday, ending a five-day rally after briefly touching a three-week high of $2,722.

This pullback was triggered by improving investor sentiment following key developments in the U.S. and abroad, including President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary and reports of easing tensions in the Middle East.

The nomination of Bessent, a proponent of deficit control, calmed market uncertainty and provided reassurance to bond investors. This led to a sharp drop in U.S. Treasury yields and some profit-taking on the U.S. Dollar (USD), which recently surged to its highest level since November 2022.

As a result, gold’s decline was limited, but the safe-haven asset remained under pressure.

Economic Optimism Weighs on Gold

Positive market sentiment was further fueled by the release of S&P Global’s U.S. Composite PMI for November, which reached its highest level since April 2022.

This points to accelerated economic activity in the fourth quarter and bolstered investor confidence in equities. Additionally, optimism surrounding Trump’s business-friendly policies added momentum to risk-on assets, diverting interest away from gold.

Federal Reserve officials have also signaled caution on inflation risks, with traders pricing in a 55% probability of a 25 basis point rate cut in December.

These expectations, combined with Bessent’s fiscal conservatism, are putting additional downward pressure on gold prices as investors anticipate steadier interest rates.

Focus on Upcoming U.S. Data

Traders are now eyeing the minutes from the Federal Open Market Committee’s (FOMC) November meeting and the U.S. Personal Consumption Expenditure (PCE) Price Index for further direction.

These reports could provide clarity on inflation trends and the Fed’s monetary policy, factors that heavily influence gold prices.

As optimism builds in equity markets and Treasury yields stabilize, the appeal of safe-haven assets like gold could wane. Unless significant geopolitical risks resurface, gold prices may face resistance in regaining upward momentum.

Short-Term Forecast

Gold prices hover near $2,663, with $2,664 as a key pivot. A rebound targets $2,684 resistance, while a break below exposes $2,649 support, signaling potential short-term bearish momentum.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,663, down 1.60%, as it tests key support at $2,664.37. This pivot point aligns closely with the 50 EMA at $2,664.09, reinforcing its importance as a critical level for determining the next move.

If gold holds above this support, a rebound could target immediate resistance at $2,684.45, with further upside potential at $2,704.45 and $2,721.48.

On the downside, a break below $2,664 could expose prices to $2,649.20 and potentially deeper support at $2,634.75. The 200 EMA at $2,656.10 offers an additional safety net, but sustained selling may drive further declines toward $2,618.60.

Traders should watch $2,664 carefully—it’s a tipping point for either renewed bullish momentum or sharper losses.