Gold Forecast: XAU/USD awaits weekly trading range breakout ahead of US CPI report

Gold (XAU/USD) struggles to capitalize on the previous day's move higher back closer to the $4,350 level and trades with a mild negative bias during the Asian session on Thursday. The downtick could be attributed to some profit-taking amid a US Dollar (USD) uptick, though it is likely to remain cushioned on the back of a supportive fundamental backdrop. Traders might also opt to wait for the release of the US consumer inflation figures before placing fresh directional bets around the commodity.

Federal Reserve Governor Christopher Waller – one of five finalists to potentially succeed Jerome Powell – said on Wednesday that he will emphasize the importance of central bank independence to US President Donald Trump. Waller further added that given the outlook, there is no rush to get down on interest rates. This, in turn, assists the USD to preserve its recovery gains from the lowest level since early October, touched following the release of mixed US employment details earlier this week.

The US Bureau of Labor Statistics (BLS) reported that the economy added 64K jobs in November, beating consensus estimates for a 50K increase. This, however, was offset by October's dismal figures, which showed that payrolls declined by 105K on the back of the longest-ever US government shutdown. Moreover, a rise in the Unemployment Rate to 4.6%, or the highest level since September 2021, and signs of slowing growth in wages, backs the case for further easing by the US central bank.

The view was echoed by Fed's Waller, saying that the US central bank ‌still has room to cut interest rates amid evident signs of labor market weakness. The Fed’s Summary of Economic Projections in December penciled in just one rate reduction in 2026, though traders have been pricing in the possibility of two rate cuts next year. This is holding back the USD bulls from placing aggressive bets and might continue to act as a tailwind for the non-yielding Gold amid a generally weaker risk tone.

Investors remain on edge amid persistent concerns over stretched valuations and prospects for further policy tightening by the Bank of Japan (BoJ). Apart from this, worries about the health of the world's two largest economies – the US and China – keep the global risk sentiment on the defensive and should further contribute to limiting the downside for the safe-haven Gold. Furthermore, traders seem reluctant ahead of the US Consumer Price Index (CPI) report, due later this Thursday.

The crucial inflation data would influence expectations about the Fed's future rate-cut path, which, in turn, will play a key role in driving the USD demand in the near-term and determining the next leg of a directional move for the Gold. Nevertheless, the aforementioned supportive fundamental backdrop suggests that the path of least resistance for the XAU/USD pair remains to the upside. Hence, any meaningful corrective decline might still be seen as a buying opportunity and remain shallow.

XAU/USD 1-hour chart

Technical Analysis:

The XAU/USD pair holds above the 100-hour Simple Moving Average (SMA), currently pegged around the $4,313 area. The upward slope supports a mild intraday bullish bias as long as this dynamic support contains pullbacks. Meanwhile, the Moving Average Convergence Divergence (MACD) slips below the Signal line and holds in negative territory. Moreover, the widening negative histogram suggests strengthening bearish pressure. The Relative Strength Index (RSI) stands at 52.82 (neutral), easing toward the midline. Holding above the rising 100 SMA would keep dips supported, while a clear break back below that average would open the door to a deeper retracement.

(The technical analysis of this story was written with the help of an AI tool)