Gold Price Forecast: Buyers face dark clouds as XAU/USD posts lower lows

XAU/USD Current price: $4,869

• Gold's failure to retain the $5,000 mark leads to firmer selling interest.
• The US Dollar gains even in a risk-averse environment amid American economic resilience.
• XAU/USD drew a line in the sand for buyers in early February at $4,402.

Gold buyers have been reluctant to give up, but XAU/USD’s behaviour suggests they may face a tough battle in the upcoming days. The rally that saw the Gold price double in a little over a year and drove the bright metal to record highs came to a halt at the end of January, when the price dropped $1,200 per ounce in a couple of days.

The subsequent recovery was initially encouraging, but continued failure to retain gains beyond the $5,000 is discouraging buyers more as time goes by. Even worse, risk-off peaks tend to benefit the Greenback, even against the safe-haven par excellence.

The battle between sellers and buyers is likely to continue, yet the firsts are slowly gaining ground. Following failure to retain the psychological mark, Gold is making lower lows on a daily basis, usually a sign of further declines ahead.

What makes the US Dollar a better bet?

There’s one word to sum it up: resilience. The United States (US) economy has proven resilient, with steady growth despite fluctuations in the labor market and stubborn inflation. It has also proved resilient despite US President Trump's foreign and protectionist policies, and even with the Federal Reserve’s independence under threat. One may love it or hate it, but there’s no doubt the US is the world’s largest economy, and there’s nobody out there to challenge the crown.

XAU/USD short-term technical outlook

Gold drew a line in the sand in early February, bottoming at $4,402. As long as the price remains above the level, bulls will retain some hopes, yet the closer the level comes, the more discouraged they will be.

In the near term, and according to the 4-hour chart, XAU/USD is bearish. The 20-period Simple Moving Average (SMA) has slipped beneath the 100-period SMA, both tilt lower, and are above the current level, providing near-term dynamic resistance at $4,967 and $5,017. Meanwhile, a mildly bullish 200-period SMA provides support around $4,827. The Momentum indicator aims marginally lower within neutral levels, yet the Relative Strength Index (RSI) indicator at 33 hints at lower lows ahead.

In the daily chart, XAU/USD finally broke below the 20-day SMA, now capping advances in the $4,990 area. Price holds above the longer SMAs, which, anyway, develop below the critical $4,400 region. Finally, technical indicators aim firmly lower, with the Momentum dipping into negative territory and the RSI crossing its midline to the downside, in line with mounting selling pressure.

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