FX.co ★ XAU/USD: Analysis and Forecast

Gold continues to trade within a consolidated range amidst conflicting indicators, staying in a familiar price zone. Persistent geopolitical risks, fears of trade wars, and political turmoil in France and South Korea continue to support the safe-haven appeal of gold. Additionally, today's weaker U.S. dollar provides another layer of support for the precious metal.

However, expectations of a less dovish Federal Reserve policy are putting upward pressure on U.S. Treasury yields, capping gold's upside. Comments from several FOMC members, including Fed Chair Jerome Powell, suggest the central bank will adopt a cautious stance on rate cuts. Traders should exercise caution before opening aggressive positions in XAU/USD, particularly ahead of Friday's critical U.S. Nonfarm Payrolls (NFP) report.

Technical Analysis

Neutral Bias and Key Levels to WatchDaily and 4-hour oscillators, reflecting a neutral bias, suggest waiting for a decisive breakdown below the $2630 support range before considering further losses.

Downward Levels:

• A break below $2630 could push the price toward the weekly low and the psychological support level of $2600.
• The decline may extend toward the 100-day simple moving average (SMA) and further toward November's low.

Upward Levels:

• Near-term resistance at $2655 may limit initial gains, followed by last Friday's swing high at $2665.
• A sustained break above $2665 could pave the way for a retest of the $2700 psychological level, a significant pivot point for gold.
• Further upward movement beyond $2700 would face strong resistance near the $2721 resistance level. A breakout here could shift momentum in favor of bullish traders.

In light of the mixed signals, traders are advised to remain cautious and await clearer directional cues.