- Gold struggles at $2,665 and resumes its near-term bearish trend as the U.S. Dollar strengthens.
- Investor concerns over a potential "hawkish cut" by the Fed on Wednesday are driving U.S. Treasury yields higher.
- XAU/USD remains under pressure, nearing key support around the $2,630 level.
Gold’s (XAU/USD) upside attempts remain short-lived as the precious metal extends its decline during Tuesday’s European session, pressured by surging U.S. Treasury yields and a stronger U.S. Dollar (USD).
Monday’s stronger-than-expected preliminary U.S. S&P Global PMI figures reinforced expectations of steady economic growth in the fourth quarter, supporting the outlook for gradual Federal Reserve (Fed) easing in 2025.
Later today, U.S. Retail Sales data is expected to highlight resilient consumer spending in November. Against this backdrop, investors remain confident that the Fed will announce a rate cut on Wednesday but anticipate a hawkish tone in its forward guidance. This scenario continues to lift U.S. Treasury yields, keeping Gold under pressure.
Daily Market Movers: Gold Struggles Amid Expectations of a Hawkish Fed
- Gold continues to lose ground as concerns over the Middle East conflict recede, at least for now. Market attention has shifted to the U.S. Federal Reserve, which begins its two-day monetary policy meeting today.
- According to the CME Group’s FedWatch Tool, futures markets are nearly fully pricing in a 25 bps rate cut on Wednesday but assign less than a 30% probability of more than two quarter-point cuts in 2025.
- U.S. data released on Monday showed stronger-than-expected growth in business activity within the services sector for December, reinforcing the view that the economy remains on a solid footing in the fourth quarter.
- Later today, U.S. Retail Sales are anticipated to rise by 0.5% in November, up from October’s 0.4% increase. This points to continued strength in consumer spending, which accounts for 65% of the Gross Domestic Product (GDP), and signals a positive contribution to Q4 growth.
Technical Analysis: XAU/USD Under Pressure with $2,630 Support in Focus
Gold continues its downward trajectory after facing rejection at the $2,720 resistance zone last week. A potential double top at this level, combined with Thursday’s bearish engulfing candle, has strengthened the bearish outlook for sellers.
The 4-hour chart reveals a negative candle, signaling growing bearish momentum. Immediate support lies near the $2,630 level, corresponding to the December 9 low. A break below this area could expose the key downside target around $2,610, marked by the lows from November 25, 26, and December 6.
On the upside, resistance levels to watch include Monday’s high at $2,665 and Friday’s intraday peak at $2,690.
XAU/USD 4-Hour Chart
