Gold (XAU) Price Forecast: Will Strong Dollar Push Prices Below $2607 Support?

Gold prices are finding support near the retracement zone of $2629.13 to $2607.35. A decisive break below $2607.35 could trigger an accelerated move toward the next major target zone at $2538.50 to $2536.85. On the upside, resistance is capped by a zone at $2663.51 to $2693.40, with $2721.42 representing the next significant high.

The yellow metal is also trading below its 50-day moving average of $2669.54, underscoring the bearish intermediate trend. This technical setup suggests sellers remain in control unless a break above the resistance zone materializes.

Dollar Strength Weighs on Gold

The U.S. dollar index gained 0.5% on Monday, its strongest daily performance in over a week, making gold more expensive for holders of other currencies. Market sentiment was influenced by comments from President-elect Donald Trump, who urged BRICS nations to abandon plans for an alternative currency to the U.S. dollar. Trump warned of 100% tariffs on nations failing to comply, raising fears of prolonged U.S. rate hikes to support the dollar.

In November, gold saw a steep 3.41% decline, marking its largest monthly loss since September 2023. The drop was attributed to concerns that tariff policies and geopolitical pressures could sustain higher interest rates longer than expected.

Upcoming Data to Shape Market Outlook

This week’s economic calendar is packed with data releases, including job openings, ADP employment figures, and non-farm payrolls. Investors will closely monitor these reports, along with speeches from Federal Reserve officials, for further clues on the central bank’s policy direction.

Major brokerages anticipate a 25 basis-point rate cut in December, following recent inflation data that aligned with expectations. A dovish Fed stance could provide support for gold, alongside ongoing central bank purchases and safe-haven demand driven by geopolitical uncertainties.