Gold Price Forecast: XAU/USD failing to retain $4,000 amid broad US Dollar demand

XAU/USD Current price: $3,998.14

• Manufacturing output in the United States remained relatively stable in October.
• The Reserve Bank of Australia will announce its decision on monetary policy on Tuesday.
• XAU/USD extends its consolidative phase around $4,000, risk skews to the downside.

Spot Gold trades around the $4,000 mark on Monday, confined to a well-limited intraday range. Financial markets are struggling for a fresh catalyst amid the United States (US) extended government shutdown and the subsequent lack of fresh data.

Investors continue pricing in the latest Federal Reserve (Fed) monetary policy announcement, which surprised with a hawkish tilt as Chair Jerome Powell put at doubt a December interest rate cut. As a result, the US Dollar (USD) trades with a firmer tone against most major rivals, while stocks remain under pressure, with US indexes trading mixed at the time of writing.

Private data showed manufacturing output in the US was pretty stable in October. On the one hand, the S&P Global Manufacturing Purchasing Managers’ Index (PMI) was upwardly revised to 52.5, surpassing the anticipated 52.2. On the other hand, the ISM Manufacturing PMI for the same period eased to 48.7 from 49.1 in September, also missing the expected 49.5.

Generally speaking, the first week of each month stands out for the US employment-related data, most of which won’t be released this time amid the federal shutdown. The private ADP survey on Employment Change will be out as usual, but no other figures should be expected in the upcoming days.

Aside from that, investors will be watching the Reserve Bank of Australia (RBA), which is expected to announce its decision on monetary policy early on Tuesday. The RBA is widely anticipated to keep rates on hold, which should have a limited impact on financial markets. Hints on whatever policymakers are planning next, on the contrary, could shake financial boards, particularly if the message is dovish.

XAU/USD short-term technical outlook

In the 4-hour chart, XAU/USD is currently trading at around $3,998, down $13 for the day. Price action is tethered to the 20 SMA, which has flattened after prior declines and stands at $3,996, while a rising 200 SMA at $3,978 underpins the downside. Also, a directionless 100 SMA at $4,110 caps the topside. This mixed moving-average configuration reflects the ongoing consolidation. Meanwhile, the Momentum indicator has slipped back into negative territory, with the latest reading just below the 100 line, underscoring fragile directional strength. Finally, the Relative Strength Index (RSI) indicator has eased to 48, in line with lower lows ahead.

In the daily chart, the bullish 20 SMA advances above the longer ones, although the price trades beneath it, making the 20 SMA at $4,088 an immediate dynamic resistance. A bullish 100 SMA stands at $3,590, while the 200 SMA trends higher at $3,353, both of which underpin the broader bullish bias. Also, the Momentum indicator has retreated further lower after failing to overcome its midline, printing a fresh multi-session low and flagging mounting bearish pressure. The RSI at 51remains flat, indicating absent directional strength and tempering the bearish impulse. A daily close back above the 20 SMA at $4,088 would reassert the upside and open the door for additional gains, whereas a failure to reclaim it would keep the risk tilted toward a retest of the rising support band at $3,590/$3,353.

(This content was partially created with the help of an AI tool)