Gold (XAU) Daily Forecast: Will Support at $2,668 Hold as Treasury Yields Rise?

Market Overview

Gold prices (XAU/USD) struggled to maintain upward momentum, trading around $2,672.70 and reaching an intra-day low of $2,666 as the U.S. dollar extended its strength.

The dollar, nearing a four-month high, gained further ground amid market optimism surrounding President-elect Donald Trump’s proposed corporate tax cuts. These anticipated fiscal policies have buoyed the dollar, making safe-haven assets like gold less attractive for investors.

The dollar’s upward trajectory has been further supported by positive sentiment in the broader U.S. market, where economic growth expectations are on the rise.

This optimism is also reflected in U.S. Treasury bond yields, which remain elevated, adding additional weight to gold prices as higher yields often reduce gold’s appeal.

Traders Eye Upcoming Inflation Data and Fed Speeches

Investor attention is now focused on key economic data and Federal Reserve commentary expected this week. U.S. consumer inflation figures, set to be released, will provide insight into price stability and could influence Fed policy direction.

Additionally, remarks from Fed Chair Jerome Powell and other central bank officials are scheduled, with traders closely watching for any signs of future monetary policy adjustments.

The Federal Reserve recently lowered its benchmark interest rate by 25 basis points and suggested further rate cuts may be on the horizon.

However, Fed policymakers, including Minneapolis Fed President Neel Kashkari, emphasized that they want stronger evidence of inflation heading towards the 2% target before making additional cuts.

Global Trade Tensions and Gold’s Safe-Haven Role

While Trump’s protectionist policies raise the potential for global trade tensions, these could act as a double-edged sword for gold. Heightened trade friction may push some investors back into gold as a hedge against market volatility.

In summary, gold remains under pressure due to the strengthening U.S. dollar and elevated Treasury yields. However, potential Fed rate cuts and renewed trade concerns may offer intermittent support to gold, making this a crucial period for traders evaluating safe-haven assets.

Short-Term Forecast

Gold remains under pressure, trading around $2,670. A break below $2,668 could lead to further declines, while holding above may prompt a rebound towards $2,684. Market sentiment hinges on dollar strength.

Gold Prices Forecast: Technical Analysis

Gold is trading lower today at $2,672.70, down 0.44%, as the precious metal faces pressure around a pivot point of $2,668.55. If gold remains above this level, we could see a bullish bounce, with immediate resistance at $2,683.83 and further hurdles at $2,696.64 and $2,709.14.

However, a dip below $2,668.55 might signal more downside, with key support at $2,654.34 and additional layers at $2,643.35 and $2,632.75.

The technical indicators show a challenging road ahead, with the 50-day EMA at $2,697.33 and the 200-day EMA at $2,711.69 adding to the overhead resistance. For now, the sentiment leans bullish above the pivot, but caution is warranted if prices slip below this level.