Gold (XAU) Daily Forecast: Will Gold Rebound from $2,725 or Continue Bearish Trend?

Market Overview

Gold (XAU/USD) prices struggled to maintain their recent gains, dipping to around $2,725 on Friday as the U.S. dollar regained strength. Investors, increasingly focused on economic signals, are moving away from the safe-haven appeal of gold.

The greenback, bolstered by expectations that the Federal Reserve may adopt a slower approach to rate cuts, has added pressure on the precious metal, making it less attractive for investors seeking stability.

U.S. Dollar Gains on Fed Rate Expectations

The U.S. dollar has stabilized after reaching a three-month high earlier in the week, driven by speculation that the Federal Reserve will opt for a more cautious stance on rate cuts.

“The data from the U.S. continues to show economic resilience, which is lowering the market’s expectations for aggressive rate cuts,” according to a note from a financial strategist.

This shift in expectations is weighing on gold prices, as a stronger dollar reduces the appeal of the metal, typically seen as a hedge against economic uncertainty.

Economic Data to Shape Gold’s Near-Term Outlook

Friday’s U.S. economic data is poised to play a key role in determining the short-term direction of gold prices. Market participants are closely watching the release of Durable Goods Orders and the Michigan Consumer Sentiment Index, both of which are expected to provide fresh insights into the state of the U.S. economy.

Strong data could further support the dollar, applying additional pressure on gold, while weaker figures might renew interest in safe-haven assets like the yellow metal.

For now, gold remains under pressure, with limited downside thanks to lingering geopolitical tensions and political uncertainty in the U.S. as the November 5 presidential election approaches. However, traders will be keenly observing the data to adjust their strategies ahead of the weekend.

Short-Term Forecast

Gold prices are hovering around $2,725, facing pressure from a stronger U.S. dollar. Key support lies at $2,716, with potential gains if prices hold above $2,727.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) trades around $2,727.97, down 0.29% on the day. Currently, it’s testing the pivot point at $2,727.95, a critical level for traders. If prices hold above this level, we could see a push higher toward the immediate resistance at $2,737.21, with further targets at $2,746.10 and $2,757.81.

On the downside, immediate support is at $2,716.15, followed by key levels at $2,708.82 and $2,702.35. Technical indicators like the 50-day EMA ($2,731.77) are signalling a cautious bullish sentiment.

However, any break below the pivot point could trigger a sharp sell-off, so traders should watch these levels closely.