Gold Price Forecast: XAU/USD plunges on sudden US Dollar demand

Valeria Bednarik FXStreet

XAU/USD Current price: $4,951

US indexes plunged amid renewed concerns about AI's potential profits.
The strong US NFP report released on Wednesday adds to USD strength.
XAU/USD turns negative in the near-term, but dip buying persists.

Gold prices remained lifeless throughout the first half of Thursday, but sudden US Dollar (USD) demand in the American session saw the pair plummet to $4,878.71, its lowest for the week.

Wall Street’s collapse partially explains USD strength, with all US major indexes turning deeply negative amid renewed concerns about overvalued tech shares. The real estate sector also suffered after some comments from Elon Musk about sending it into space.

Additionally, a Russian memo hints at more collaboration between the country and the US related to energy and minerals, and even the possibility of Russia returning to the USD system.

Finally, the solid United States (US) Nonfarm Payrolls (NFP) report came back to play. The upbeat figures boosted the USD temporarily, but without some additional help, the Greenback had no room to run. The latest catalyst added to the USD bullish case was triggered on Wednesday by the NFP report.

Market players are also awaiting the release of the US January Consumer Price Index (CPI). Inflation is foreseen as mixed, with expectations of steady 0.3% monthly inflation and a modest yearly downtick expected, which cannot really affect future Federal Reserve decisions.

Back to Gold, the bright metal is incapable of benefiting from the risk-averse environment; volatility around the bright metal, however, is high, with the price now trading over $70,00 above the intraday low.

XAU/USD short-term technical outlook

From a technical point of view, the 4-hour chart for XAU/USD shows the risk skewed to the downside. The 20‑period Simple Moving Average (SMA) has started to flatten after a steady climb, remaining above the slower 100‑ and 200‑period SMAs. Price sits below the 20 and 100 SMAs, providing resistance in the $5,012.12 - $5,049.90 band, while the 200 SMA offers dynamic support at $4,769.06. At the same time, technical indicators turned sharply bearish, heading south almost vertically within negative levels, reflecting mounting selling pressure.

In the daily chart, XAU/USD briefly pierced the bullish 20-day SMA before recovering above it, but remains nearby, with the SMA currently at $4,952.06. The longer moving averages are still too far below the shorter one to be relevant, while maintaining their upward slopes. Finally, the Momentum indicator is piercing its midline, while the Relative Strength Index (RSI) indicator also turned lower, currently standing at 53, both suggesting lower lows ahead.

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

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP on edge as sell-side pressure intensifies

Cryptocurrency prices are broadly correcting on Tuesday, led by Bitcoin (BTC) edging lower below the pivotal $80,000 level. Ethereum (ETH) mirrors Bitcoin’s neutral-to-bearish outlook, while Ripple (XRP) hovers around $1.30.

Experts agree: Fed policy outlook and geopolitical tensions keep US Dollar bid

The US Dollar Index rallies 0.6% in three days and hits fresh two-week highs above 102.00. Investors return to the US Dollar as markets brace for a hawkish hold by the Fed on Wednesday. Waning hopes of any immediate US-Iran peace deal have provided additional support to the safe-haven USD.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.