Gold (XAU) Daily Forecast: Will $2,608 Support Hold Amid Dollar Strength?

Market Overview

Gold prices (XAU/USD) declined over 3% on Tuesday, hitting an intra-day low near $2,605, as a stronger U.S. dollar and rising Treasury yields added pressure. The dip followed the nomination of Scott Bessent as U.S. Treasury Secretary, which boosted global optimism and spurred interest in riskier assets.

Additionally, easing geopolitical tensions, including reports of a potential ceasefire in Lebanon, further undermined the safe-haven appeal of gold. The market is closely watching the Federal Reserve’s next moves, with the release of the FOMC meeting minutes expected to provide key insights.

Rising expectations for a less dovish Fed, combined with Treasury yields pushing higher, are weighing heavily on the non-yielding metal, limiting its appeal.

Safe-Haven Demand Provides a Cushion

Despite the downtrend, gold remains supported by renewed safe-haven demand. Market caution persists amid concerns about President-elect Donald Trump’s warning of potential tariffs and the economic impact of stricter trade policies.

Investors remain wary, with some reallocating to gold to hedge against uncertainties in global growth.

Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari have hinted at possible future rate cuts if economic conditions warrant. However, markets largely expect the Fed to remain focused on curbing inflation, adding to the dollar’s bullish momentum.

Key Economic Data to Drive Market Sentiment

Traders are also eyeing upcoming U.S. economic data, including revisions to Q3 GDP and the PCE Price Index, to gauge the Fed’s trajectory.

While the dollar’s strength and yields cap gains for gold, potential tariff impacts and investor caution keep further declines in check.

Short-Term Forecast

Gold prices remain under pressure near $2,620, with bearish momentum targeting $2,608 and $2,589. A break above $2,629.61 could shift sentiment toward a bullish recovery.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,620.48, down 0.21%, as it hovers below a key pivot level at $2,629.61. Immediate support rests at $2,608.12, with deeper levels at $2,589.60 and $2,566.78 if bearish momentum continues. Resistance is seen at $2,651.77, followed by $2,678.56 and $2,704.69, where sellers may challenge further gains.

The 50-day EMA at $2,648.12 and the 200-day EMA at $2,655.84 are currently capping upside attempts, reinforcing a bearish short-term outlook. A break above the pivot could reignite bullish interest, targeting higher levels.

For now, gold remains vulnerable to downside pressure, but traders should watch for any decisive moves above $2,629.61 to confirm a potential recovery.