Gold Price Forecast: XAU/USD failure to retain $4,000 hints at a steeper decline

XAU/USD Current price: $3,984.51

• The US Challenger Job Cuts report showed that US-based employers announced 153,074 cuts in October.
• Wall Street plummets amid concerns surrounding the tech sector, reviving demand for the USD.
• XAU/USD is at risk of piercing its recent lows in the $3,880 price zone.

Spot Gold enjoyed near-term demand throughout the first half of the day, peaking at $4,019.66 on Thursday. The XAU/USD pair changed course after the American opening, as Wall Street plunged, fueling demand for the US Dollar (USD), particularly against safe-haven and commodity-linked rivals. As a result, Gold turned south and trades in the $3,980 price zone.

European indexes closed in the red, indicating that the market’s sentiment began deteriorating earlier in the day, although without a clear catalyst. The only available data from the United States (US) was indeed discouraging, as the Challenger Job Cut report showed that US-based employers announced 153,074 job cuts in October, up from the 55,597 cuts announced a year earlier, and higher than the 54,064 job cuts announced in September. Other than that, stocks fell on the back of mounting concerns bout overvalued tech shares.

Meanwhile, the US government shutdown continues, now officially the largest in the country’s history. House Speaker Mike Johnson held a press conference and noted that he is less optimistic about the shutdown ending, triggering a fresh wave of risk aversion.

The upcoming Asian session will bring the Chinese October Trade Balance, relevant amid the trade war with the US. Other than that, the macroeconomic calendar has nothing relevant to offer, with the US Nonfarm Payroll (NFP) suspended for a second consecutive month.

XAU/USD short-term technical outlook

XAU/USD is currently trading at around $3,985, little changed on a daily basis, yet biased lower in the near term. The 4-hour chart shows the pair remains capped beneath a rising 200 SMA at $4,003 and well below a declining 100 SMA at $4,084, keeping upside attempts in check. A bearish 20 SMA slides below the longer ones, suggesting sellers hold the grip; the 20 SMA stands at $3,982 and offers fragile nearby support. The same chart shows the Momentum indicator remains stuck around its midline, while the RSI eased to 49 from recent highs, also failing to provide clear directional clues.

)In the daily chart, XAU/USD dipped further below the 20-day SMA, which has lost its upward strength and stands at $4,084. By contrast, the 100-day at $3,608 and the 200-day at $3,371 continue to advance, keeping the broader bias tilted higher. At the same time, the Momentum indicator sits well below the 100 line, although it is off its weekly low. Finally, the RSI indicator eased to 50, reinforcing a neutral, consolidative stance. A sustained break above the 20-day SMA resistance at $4,084 would reinstate upward traction alongside the rising longer averages, whereas failure to reclaim it keeps risks skewed to the downside, with initial support at $3,889, the weekly low. Beyond the latter, the slide can continue $3,608 and $3,371, where the 100- and 200-day SMAs are located.

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