Gold Price Forecast: XAU/USD extends rally past $4,200 amid US government reopening hopes

Valeria Bednarik FXStreet

XAU/USD Current price: $4,204.20

Market players anticipate the US government shutdown will end in a matter of days.
Official United States data is likely to flood news feeds next week.
XAU/USD reconquered the $4,200 mark and aims to continue advancing.

Spot Gold flirts with the $4,200 level in the American session on Wednesday, as demand for the US Dollar (USD) continues to lose steam. The Greenback managed to post some modest intraday gains against the bright metal at the beginning of the day, but quickly changed course despite a generalized better market mood.

On the one hand, financial markets anticipate that the United States (US) will end the funding stalemate as soon as this week, as the House of Representatives is due to vote on the Senate funding bill before the day is over. After that, it would only be pending US President Donald Trump's signature to become a law.

On the other hand, Asian and European indexes traded with a better tone amid a bounce in the tech sector, although US ones remain mixed, with only the Dow Jones Industrial Average posting record highs at the time of writing.

It is worth noting that the US government reopening will bring back official data, critical ahead of the Federal Reserve (Fed) December monetary policy decision. In previous shutdowns, data releases began five working days after the federal reopening, which means the upcoming week could be quite busy.

XAU/USD short-term technical outlook

XAU/USD trades at $4,204.20, and the 4-hour chart shows it's up for the day. The 20-period Simple Moving Average (SMA) climbs above the 100- and 200-period SMAs, while price holds above all three, keeping the near-term tone positive. The 100-period SMA flattens after a prior slide, and the 200-period SMA rises, reinforcing bullish pressure. At the same time, the Momentum indicator resumed its advance above its 100 line, while the Relative Strength Index (RSI) indicator stands at 72 , partially losing its bullish strength.

Bulls remain in control as the short-term trend rises and dips stay supported by the moving averages. A pullback would find deeper support at the 200-period SMA near $4,042.81 and the 100-period SMA at $4,035.33. A break under the $4,042.81–$4,035.33 area would deny the bullish potential.

In the daily chart, the 20-day SMA stands above the 100- and 200-day measures, with the longer SMAs rising while the 20-day flattens. XAU/USD holds above all of them, which keeps the risk skewed to the upside. Technical indicators, in the meantime, hint at mounting upward pressure, as the Momentum and the RSI advance within positive levels.

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

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD treads water above 0.7000 ahead of the RBA

AUD/USD alternates gains with losses just above the 0.7000 yardstick ahead of the opening bell in Asia on Tuesday. The pair’s decline follows the Greenback’s decent advance in a context of heightened geopolitical effervescence. Moving forward, the RBA is expected to hike its OCR to 4.60%.

USD/JPY climbs back toward 158.00 after BoJ minutes amid firm USD

USD/JPY finds dip-buyers and reverses part of Friday's slide driven by speculation that authorities will step in again to prop up the Japanese Yen. However, the BoJ's dovish Minutes cap the JPY. Meanwhile, the US Dollar regains traction as the US-Iran standoff supports crude oil prices, fueling inflation fears and reaffirming bets for an October Fed rate hike. This further supports the pair, driving it back toward 158.00.

Gold tumbles further; focus shifts to $4,100

Gold kicks in the week on the back foot, selling off to the vicinity of the $4,100 mark per troy ounce, levels last traded back in early August. The resurgence of geopolitical concerns in combination with the firmer US Dollar and rising US Treasury yields keep the yellow metal under heavy pressure on Monday.

Strategy buys 1,665 Bitcoin amid renewed geopolitical tensions

Bitcoin (BTC) dropped below $84,000 on Monday as Strategy (MSTR) announced a fresh treasury purchase of $143 million last week, boosting its holdings to 847,666 BTC. The company purchased 1,665 BTC for roughly $142.7 million, according to a filing with the Securities and Exchange Commission (SEC) on Monday.

The week ahead: A key moment for the global economy as threats rise

UK diesel hits a record, as economic concerns rise. The market expects an aggressive Fed rate hiking cycle, but is it necessary? Oil supply concerns ease, even as oil prices rise. What’s next for the AI trade.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.