Gold Price Forecast: XAU/USD recovers its bullish stance on geopolitical turmoil, tepid US data

Valeria Bednarik FXStreet

XAU/USD Current price: $4,445

United States intervention in Venezuela spurred demand for safe-haven Gold.
The US ISM Manufacturing PMI contracted to 47.9 in December, worse than expected.
The XAU/USD pair is technically bullish after bouncing from its 20-day SMA.

Spot Gold trades around the $4,450 level on Monday, sharply up on a daily basis amid broad US Dollar (USD) weakness. The bright metal found support throughout the first half of the day on geopolitical turmoil, extending its advance afterwards on the back of poor United States (US) data.

The world found out on Saturday that US President Donald Trump ordered a strike on Venezuela, capturing President Nicolás Maduro and his wife and bringing them to the US to be judged on narco-terrorism, among other charges. The news triggered global noise and boosted demand for the safe-haven metal, as caution rules.

Early in the American session, the USD suffered a setback following the release of the December Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI). The index came in at 47.9, below the expected 48.3, and worse than the 48.2 posted in November. The report also showed that the Employment Index improved slightly to 44.9 from 44 in November, while the Prices Paid Index, the inflation component, remained unchanged at 58.5.

The US labor market will take centre stage this week, as the country will release multiple employment-related figures. The ADP employment Change report for December and November JOLTS Job Openings will be out on Wednesday, while weekly unemployment data will be released on Thursday, and the all-mighty Nonfarm Payrolls (NFP) report will be out on Friday.

XAU/USD short-term technical outlook

From a technical point of view, the 4-hour chart shows XAU/USD trades at $4,445.56, roughly $45.50 up for the day. The same chart shows the 20-period Simple Moving Average (SMA) has turned higher but still trails the rising 100-period SMA, both around the $4,370 level. The 200-period SMA, in the meantime, advances at $4,267 underpinning the broader structure. Also, the Momentum indicator stands above 0 and expands, signaling strengthening buying interest. Finally, the Relative Strength Index (RSI) indicator is heading north around 60, in line with the dominant bullish trend.

In the daily chart, XAU/USD bounced after testing a bullish 20-day SMA at $4,343, which also rose above the bullish 100- and 200-day SMAs, all of which reinforce the bullish bias. The Momentum indicator advances above its midline, while the RSI indicator has partially lost its upward strength at around 63, underpinning the broader uptrend.

(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.

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