Gold Price Forecast: XAU/USD pressures intraday highs as mood sours

XAU/USD Current price: $2,672.99

• The United States Producer Price Index rose by less than anticipated in December.
• Speculative interest continues to trade on sentiment and Donald Trump’s headlines.
• XAU/USD ticks higher as the sentiment deteriorates, limited directional strength.

Spot Gold trades within familiar levels on Tuesday as a better market mood weighed on safe-haven demand throughout the first half of the day. The sentiment improved on headlines indicating that President-elect Donald Trump’s team is considering gradual tariff increases over the upcoming months to prevent a sudden increase in inflation. The plan, not confirmed neither deny by Trump at the time being, implies 2% to 5% tariffs increased per month.

Meanwhile, the United States (US) reported that wholesale-level inflation rose by less than anticipated in December. The Producer Price Index (PPI) rose 0.2% in the month, below the previous 0.4% and the expected 0.3%. On a yearly basis, the PPI was up 3.3%,  missing expectations of 3.4%. Finally, the core annual reading resulted at 3.5%, ticking higher from the 3.4% posted in November yet below the 3.8% anticipated by market players.

The positive mood receded as the American session developed, and the three major US indexes trade in the red.

The news reinforced speculation the Federal Reserve (Fed) will keep interest rates at their current levels for longer than previously anticipated. Speculative interest is now waiting for the US December Consumer Price Index (CPI), to be out on Wednesday. Meanwhile, the United Kingdom (UK) will also unveil CPI figures earlier in the day.

XAU/USD short-term technical outlook

XAU/USD hovers around $2,670, and the daily chart shows that bulls are cautiously adding. The pair remains above its moving averages, albeit a bullish 100 Simple Moving Average (SMA) is about to cross above a flat 20 SMA, signaling receding buying interest. Technical indicators, however, have resumed their advances within positive levels, limiting the odds of a relevant leg south.

In the 4-hour chart, a directionless 20 SMA has rejected advances since the week started, now acting as dynamic resistance at around $2,674.00. The 100 and 200 SMAs are also flat, yet well below the current level. Finally, technical indicators have ticked higher, although in neutral-to-bearish territory.

Support levels: 2,660.70 2,645.15 2,635.00

Resistance levels: 2,675.00 2,683.20 2,697.90