Gold Price Forecast: XAU/USD appears in a win-win situation ahead of key US jobs data

Gold makes another run toward $4,500 on Venezuela turmoil, Fed rate cut expectations.
US Dollar meets fresh supply on dovish Fed bets, improving risk sentiment.
Gold needs acceptance above $4,450 to extend the uptrend; daily RSI stays bullish.

Dhwani Mehta FXStreet

Gold is looking to build on the previous over 2.5% rally early Tuesday, retaking the $4,450 level as prospects of further US Federal Reserve (Fed) interest rate cuts this year continue to act as a headwind to the US Dollar (USD) recovery.

Gold cheers softer US Dollar, geopolitical woes

Gold has found fresh buyers, sitting at weekly highs above $4,450, after having dipped to near the $4,430 region earlier on. The latest leg up in Gold could be attributed to the renewed selling interest around the USD amid improving risk sentiment.

Markets shrug off the US-Venezuela geopolitical tensions, now viewing the US intervention as limited, shifting their focus back toward the expectations surrounding future rate cuts by the Fed heading in the US labor data releases due later this week.

The dovish Fed bets returned to the fore on Monday and smashed the USD alongside the US Treasury bond yields after the US ISM Manufacturing PMI declined to 47.9 in December, against the forecast of 48.3.

Slowing US economic momentum and labor market conditions continue to remain a drag on the Greenback, as markets now eagerly await the US ADP monthly Employment Change and JOLTS Job Openings data due on Wednesday before Friday’s Nonfarm Payrolls showdown.

However, if the geopolitical tensions over the US and Venezuela gather steam again, a fresh bout of USD buying could re-emerge on safe haven flows, which will likely cap the Gold price upside. All eyes are on China’s and Russia’s response to the US military aggression.

Meanwhile, the overthrown Venezuelan President Nicolas Maduro pleaded not guilty before a New York Federal court on Monday to multiple charges.

US President Donald Trump's capture of him on Saturday rattled world leaders and left officials in Caracas scrambling to regroup, per Reuters.

Gold price technical analysis: Daily chart

In the daily chart, the 21-day Simple Moving Average (SMA) climbs above the 50-, 100-, and 200-day SMAs, signaling firm bullish alignment. All SMAs advance and the price holds above them, reinforcing buyers’ control. The 21-day SMA at $4,349.26 supports the near-term bias, while the 50-day SMA at $4,201.11 underpins the broader trend.

The 14-day Relative Strength Index (RSI) stands at 64.41, positive and shy of overbought, suggesting momentum favors the upside. Should pullbacks emerge, the rising 21-day SMA could cap losses, while a deeper retracement would look toward the 100-day SMA at $3,985.64. The bullish tone would persist while XAU/USD trades above these moving averages.

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

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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