Gold Price Forecast: XAU/USD extends its advance, aims to recover the $4,500 mark

XAU/USD Current price: $4,478

• Economic growth continued in December, yet at a slower pace, according to S&P Global.
• The US ADP Employment Change report and JOLTS Job Openings will be out on Wednesday.
• XAU/USD aims to retest record highs in the $4,550 region.

Spot Gold extends its advance on Tuesday, hovering around $4,480 a troy ounce in the American afternoon. The XAU/USD pair advanced despite the better market mood, as reflected by the positive tone of global equities. Investors were cautiously optimistic after the release of tepid, yet encouraging growth-related data and ahead of the first batch of United States (US) employment data scheduled for Wednesday.

Throughout the day, S&P Global, alongside local banks, released the Services and Composite Purchasing Manager’s Indexes (PMIs) for major economies, which showed expansion continued in the Eurozone, the United Kingdom, and the US. Nevertheless, the preliminary estimates of the December Composite PMIs were slightly lower than the final November readings.

The EU index eased to 51.5 from 52.8 in November, while in the US, the Composite PMI fell to 52.7 from 54.2 in the previous month. Slower growth rates may not be an immediate concern given continued expansion, yet if the picture persists, it could prompt some fresh concerns among policymakers, and hence, affect monetary policies.

The US calendar will include the December ADP report on Employment Change and November JOLTS Job Openings on Wednesday. Given that the Federal Reserve (Fed) made clear that employment is its major concern, the data will likely shake the USD ahead of the Nonfarm Payrolls (NFP) report on Friday.

In the meantime, Australia will release the November Consumer Price Index (CPI) in the upcoming Asian session. Afterwards, German Retail Sales and the preliminary estimate of the EU HICP will precede US employment reports.

XAU/USD short-term technical outlook

From a technical point of view, XAU/USD is bullish. The 4-hour chart shows the pair holds on to modest intraday gains while advancing above all its moving averages. The 20-period 20 Simple Moving Average (SMA) at $4,404 provides relevant support while rallying beyond the longer ones, in line with the dominant trend. At the same time, the Momentum holds above its midline and advances, reflecting strengthening buying interest. Finally, the Relative Strength Index (RSI) indicator stands at 64.10, keeping room for further upside before the risk of a pause emerges. Should pullbacks occur, the 100 SMA at $4,385.02 would cushion declines, while sustained strength could keep the bias pointed higher toward fresh highs.

In the daily chart, XAU/USD keeps finding buyers on pullbacks to the 20-day SMA, which advances above the 100- and 200-day SMAs, with all three rising as price holds above them, reinforcing a bullish structure. The 20-day SMA stands at $4,357.69, offering immediate dynamic support. Meanwhile, the Momentum indicator advances above its midline, while the RSI also aims north at around 65, hinting at higher highs ahead.

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

(This story was corrected on January 7 at 02:42 GMT to state that the all-time high for Gold is around the $4,550 region, not $4,450)