Gold Price Forecast: XAU/USD remains poised to regain $4,300 and beyond

Gold sits at seven-week highs after having settled above $4,275 key resistance on Thursday
US Dollar sees a modest rebound amid profit-taking following the two-day Fed-led slump.
Gold’s daily technical setup suggests that there is scope for more upside.

Dhwani Mehta FXStreet

Gold is consolidating just below the seven-week highs of $4,286 early Friday, eyeing a roughly 2% weekly gain.

Gold buyers appear unstoppable once again

The record rally in Gold is seen reviving, courtesy of the sustained dovish expectations surrounding the US Federal Reserve (Fed), while the Bank of Japan (BoJ) is set to raise interest rates and the European Central Bank (ECB) seen on hold next week.

Despite Fed Chairman Jerome Powell sticking to his cautious rhetoric during the post-monetary policy meeting press conference on Wednesday and the Fed's median expectation for a single quarter-percentage-point cut next year, markets continued to price in two more rate cuts, keeping the downside pressure intact on the US Dollar (USD).

This narrative provided the much-needed traction to Gold’s uptrend, as the yellow metal also tracked the record-setting rally in Silver.

Additionally, Gold was powered by a Reuters report that “India's pension regulator on Wednesday issued revised investment rules for the country's pension funds, permitting investments in gold and silver exchange-traded funds.”

Meanwhile, a weak US employment report and President Donald Trump’s threats of war in Venezuela provided a further boost to the safe-haven Gold.

The Labor Department said on Thursday, Initial Claims for state unemployment benefits jumped 44,000, the biggest increase since mid-July of 2021, to a seasonally adjusted 236,000 for the week ended December 6, adding to US labor market concerns.

Heading into the weekend, Gold takes a breather as traders resort to profit-taking, in anticipation of the end-of-the-week flows and next week’s delayed Nonfarm Payrolls and inflation data releases.

All in all, any pullback in Gold will likely be quickly bought in amid growing concerns over the US employment, dovish Fed bets and a constructive near-term technical outlook.

Gold price technical analysis: Daily chart

In the daily chart, the 21-day Simple Moving Average (SMA) rises above the 50-, 100- and 200-day ones, underscoring firm bullish momentum. The metal holds well above its key SMAs, with the 21-day at $4,165.40 offering nearby dynamic support. The Relative Strength Index (14) prints 65.94, signaling strong upside momentum without overbought conditions; a push above 70 would flag stretched levels.

Measured from the $4,381.17 high to the $3,885.84 low, the 78.6% retracement at $4,275.16 acts as immediate resistance. The 61.8% retracement at $4,191.95 marks a nearby downside pivot if the advance stalls. A daily close above $4,275.16 could extend the rally, while failure there would keep price consolidating toward its rising short-term average. Note that Gold closed Thursday above the latter, justifying its bullish potential.

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

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Why it matters to traders?

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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