XAU/USD Current price: $2,681.86
- Dismal United States data fueled speculation the Federal Reserve will trim rates in 2025.
- The European Central Bank cut benchmark rates by 25 bps each, as expected.
- XAU/USD turned bearish in the near term after breaking below $2,700.
Spot Gold came under selling pressure on Thursday, trading around $2,680 a troy ounce. The US Dollar (USD) gathered momentum early in the American session following the release of dismal United States (US) data.
The country reported that Initial Jobless Claims for the week ended December 6 increased to 242K, worse than the 220K expected and above the previous 225K. Additionally, the November Producer Price Index (PPI) came in higher than anticipated, rising 3.4% on a yearly basis against the expected 3.2% and the previous 3.1%. The news pushed speculative interest into further betting on Federal Reserve (Fed) interest rate cuts through 2025.
Wall Street started the day with modest optimism but finally gave up. The three major indexes trade in the red, reflecting the poor sentiment. For a change, however, the USD has gathered more attention than gold as a safe haven.
Market players are now heading into a more quiet day, as the macroeconomic calendar has nothing relevant to offer on Friday. However, the Bank of Japan (BoJ), the Federal Reserve (Fed) and the Bank of England (BoE) will announce their decisions on monetary policy next week. Most rate decisions are widely anticipated, with the focus on what 2025 may bring to monetary policy.
XAU/USD short-term technical outlook
Technically, the XAU/USD pair is at risk of extending its slide, albeit far from bearish. The daily chart shows that the pair keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its upward slope below the current level and above also bullish 100 and 200 SMAs. However, technical indicators have turned south, with the Momentum heading firmly south below its 100 level and the RSI also pointing lower, albeit at around 54.
In the near term, and according to the 4-hour chart, XAU/USD is currently developing below its 20 SMA, which anyway remains above directionless longer ones. The corrective decline could continue, given that technical indicators head firmly lower, although considering the Momentum indicator remains above its 100 line.
Support levels: 2,676.30 2,662.50 2,650.40
Resistance levels: 2,693.70 2,704.35 2,722.60
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