Gold Price Forecast: XAU/USD pares losses, consolidates around $2,660

XAU/USD Current price: $2,666.19

• Former President Donald Trump won the 2024 presidential election.
• The Federal Reserve will announce its decision on monetary policy on Thursday.
• XAU/USD trades near its daily low, more slides likely despite near-term oversold conditions.

In one of the tight races in the United States (US) history, Donald Trump has been elected the 47th President of the world’s largest economy. Trump will return to the White House in January 2025, pulling off a stunning victory. By the time of writing, Trump has secured 277 electoral votes, more than the 270 needed to take office.

As a result, the US Dollar soared, pushing Gold prices to fresh three-week lows. XAU/USD trades near an intraday low of $2,652.29 in the mid-American session without signs of losing its downward momentum.

But not only the Greenback benefited from Trump’s victory. US indexes also run, reaching record highs, while government bonds plunged, sending Treasury yields to fresh multi-week highs. It is worth noting, however, that the 2-year note offers 4.28%, while the 10-year note yields 4.46%, the latter advancing at a faster pace and keeping the yield curve in the right place.

Excitement is far from over, given that the Federal Reserve (Fed) will announce its decision on monetary policy on Thursday. The Fed is widely anticipated to cut the benchmark interest rate by 25 basis points. The focus, however, will be on what Chairman Jerome Powell has to say about Trump’s return as the expected shift in fiscal and financial policies is likely to take its toll on US economic developments.

XAU/USD short-term technical outlook  

From a technical point of view, XAU/USD daily chart shows bearish pressure is in full shape. Technical indicators maintain their downward slopes after crossing their midlines into the negative territory, heading south almost vertically. Even further, the pair broke below a bullish 20 Simple Moving Average (SMA), which now stands at around $2,714. The 100 and 200 SMAs maintain their bullish slopes far below the current level, suggesting there is still a chance for bulls.

The pair seems to have found an intraday bottom, according to the 4-hour chart. XAU/USD plummeted below all its moving averages, with the 20 SMA accelerating its slump above, but still above the 100 and 200 SMAs. As for the longer moving averages, they have lost their upward strength. Technical indicators, in the meantime, have pared their slides but stand within extremely oversold readings.

Support levels: 2,652.25, 2,638.00 2,615.65

Resistance levels: 2,686.70 2,698.70 2,714.90