- Gold holds steady around $2,610 despite a strengthening US Dollar.
- The Fed’s outlook for fewer rate cuts next year limits Gold’s upside potential.
- XAU/USD faces pressure as it challenges support at the 100-day SMA.
The Gold price hovers near $2,611 as markets digest a more cautious outlook on US interest rates. The US Dollar remains strong, supported by the Federal Reserve’s signals of a slower pace of rate cuts in 2025, with projections for the federal funds rate to reach 3.9% by year-end. This outlook reflects a slower disinflation process and uncertainties surrounding President-elect Donald Trump’s policies on immigration, trade, and taxes.
The latest Summary of Economic Projections (SEP) fueled a rise in US Treasury yields, increasing the opportunity cost of holding Gold and contributing to its recent decline.
Looking ahead, Initial Jobless Claims on Thursday and December’s Nonfarm Payrolls, due in early January, could introduce volatility as the labor market remains pivotal for Fed policy decisions. Despite these events, Gold remains range-bound under bearish pressure.
XAU/USD Technical Analysis
Technically, XAU/USD is facing strong downward pressure, with weak momentum indicators keeping the pair in negative territory. The price is testing the 100-day Simple Moving Average (SMA) at $2,610, a key support level in recent months. A decisive break below this support could open the door for further declines, while any rebound is likely to encounter resistance around the $2,650-$2,670 range. Traders are closely monitoring this critical level for potential signs of a reversal or continuation of the bearish trend.
