Gold Price Forecast: XAU/USD holds above $4,300 after profit taking kicked in

XAU/USD Current price: $4,436

• Gold hit a fresh all time high around $4,550 before shedding over $200 on profit taking.
• The shortened holiday week will only see the release of the FOMC Minutes.
• XAU/USD needs to pierce the $4,300 level to turn bearish in the near term.

Gold prices edged sharply lower in the American session on Monday, with the bright metal currently hovering at around $4,330, after flirting with the $4,550 figure at the beginning of the new week. Gold run to record levels continued on the back of diminished US Dollar (USD) demand, exacerbated by thinned market conditions. New Year’s holiday cuts the week in half, and investors seem unwilling to take fresh risk or commit to a certain trend.

The ongoing XAU/USD slump is the result of profit taking, but by no means suggests the rally is over. The USD weakness results from speculation that the Federal Reserve (Fed) will trim interest rates in 2026 by more than what policy makers actually hinted during their December meeting. The Federal Open Market Committee (FOMC) Minutes will be released next Wednesday, and are likely to clarify some of the thinking related to the matter.

In the meantime, Wall Street trades with a negative note, with the three major indexes in the red at the time of writing, also affected by profit-taking.

XAU/USD short-term technical outlook

From a technical perspective, the XAU/USD is not yet bearish. The 4-hour chart shows that the 20-period Simple Moving Average (SMA) turned south above the current level, providing resistance at around $3,382.50. At the same time, the pair stands above the 100- and 200-period SMAs, and in fact, buyers seem to be defending the downside around the shorter one, located at $4,330.81. Meanwhile, technical indicators neared oversold readings and are currently aiming to recover, not enough, however, to confirm a near-term advance.

In the daily chart, XAU/USD bounced after testing a bullish 20-day SMA, which advances above the 100- and 200-day SMAs, with the longer ones retaining their firm upward slopes, all of which hint at buyers holding the grip. The 20-day SMA at $4,309.32 offers nearby dynamic support, while the 100-day SMA stands at $3,924.00. Finally, the Momentum indicator eases, but remains above its midline, while the Relative Strength Index (RSI) eases and stands at 54, confirming a cooldown from prior overbought conditions. A daily close above the 20-day SMA at $4,309.32 would keep buyers in control, whereas a break below that level could expose the 100-day SMA at $3,924.00.

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