Gold Price Forecast: XAU/USD looking to stabilize below $4,700

XAU/USD Current price: $4,655

• Upbeat United States manufacturing data boosted demand for the US Dollar.
• US employment-related data takes centre stage this week.
• XAU/USD appears to have found a bottom after a two-day slump.

Spot Gold edged sharply lower on Monday, falling to $4,402 a troy ounce, its lowest in roughly a month. The corrective decline that started after the bright metal reached an all-time high of $5,598 seems to have found an interim bottom, as the XAU/USD bounced from its low and currently trades around $4,660.

Volatility has been high around Gold, as the bright metal flirted with the $4,800 level early in the American session, but retreated following the release of United States (US) data, with upbeat figures boosting demand for the US Dollar (USD).

S&P Global published the final estimate of the January Manufacturing Purchasing Managers’ Index (PMI) revisi,g it from 51.9 to 52.4. More relevantly, the ISM PMI on manufacturing output improved to 52.6 from 47.9 in December, also beating the market expectation of 48.5. The same report showed improved inflation and employment-related data as the Employment Index of the PMI survey rose to 48.1 from 44.9, while the Prices Paid Index surged to 59 from 58.5.

The focus will shift to US employment data, ahead of the release of the January Nonfarm Payrolls (NFP) data next Friday. The country will publish the December JOLTS Job Openings on Tuesday and the ADP Employment Change survey on Wednesday. Market participants seem willing to keep buying the Greenback after January’s sell-off. Should persistent buying combine with a positive mood, the XAU/USD bearish case will become stronger.

XAU/USD short-term technical outlook

From a technical point of view, the XAU/USD pair seems to be looking for a bottom. The 4-hour chart shows it battled around a flat 200-period Simple Moving Average (SMA) after temporarily piercing it, while below a bearish 20-period SMA and a mildly bullish 100-period SMA, the latter providing resistance at around $4,850.56. At the same time, technical indicators have bounced after reaching oversold levels, heading higher with uneven strength, but still within negative levels. A close above the 100-period SMA at $4,850.56 would improve the bias and allow a recovery toward the short-term average at around $5,120, while failure to reclaim it would keep pressure toward the 200-period SMA support.

In the daily chart, XAU/USD trades below the 20-day SMA for the first time since mid-November, but remains above bullish 100- and 200-day SMAs. Meanwhile, the Momentum indicator heads south almost vertically, but remains above its midline, while the Relative Strength Index (RSI) indicator slips to 46.95 signaling increased selling interest.

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