Gold Price Forecast: XAU/USD stuck around $2,650 ahead of fresh clues

XAU/USD Current price: $2,654.21

• The US Dollar trades with a firmer tone amid cautious ahead of central banks’ announcements.
• The UK will publish employment figures and Canada an update on inflation on Tuesday.
• XAU/USD is bearish in the near term, but a steeper decline seems unlikely in the upcoming session.

Spot Gold saw little action at the beginning of the week, with the bright metal stuck around $2,660 a troy ounce. The US Dollar (USD) finds near-term demand in a cautious mood ahead of central banks’ announcements. In the upcoming days, the United States (US) Federal Reserve (Fed), the Bank of England (BoE) and the Bank of Japan (BoJ) will have monetary policy meetings and decide on interest rates while hinting at what 2025 could bring to the table.

The Fed is widely expected to cut the benchmark rate by 25 basis points (bps), completing a 100 bps trim in 2024. The movement has been long ago priced in, which means the focus will be on the Summary of Economic Projections (SEP) or dot plot, in which policymakers detail their expectations on inflation, growth, rates and employment. Any change to what officials were seeing back in September will have an impact on the USD.

In the meantime, S&P Global published the preliminary estimates of the December Purchasing Managers Indexes (PMIs) for most major economies. The US  report showed a solid improvement in services output, as the index printed at 58.5, much better than the 55.7 expected and the previous 56.1. The Manufacturing PMI, on the contrary, contracted to 48.3 from the 49.7 posted in November, also missing the expected 49.4.

Coming up next, the Asian macroeconomic calendar will have nothing relevant to offer, yet the United Kingdom (UK) will release the monthly employment report while Canada will release the November Consumer Price Index (CPI). Finally, the US will publish November Retail Sales on Tuesday.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart for XAU/USD shows it is seesawing around its opening while confined to a tight range. The same chart shows the pair is unable to clearly overcome a flat 20 Simple Moving Average (SMA), while technical indicators remain flat within neutral levels. The 100 and 200 SMAs maintain their upward slopes below the current level, limiting the Gold’s bearish potential.

In the near term, and according to the 4-hour chart, the risk skews to the downside. The pair is finding intraday buyers around converging and flat 100 and 200 SMAs. The 20 SMA turned gains downward traction above the longer ones, indicating mounting selling pressure. Finally, technical indicators resumed their slides within negative levels, in line with a continued slide in the upcoming sessions.

Support levels: 2,643.40 2,630.20 2,617.90

Resistance levels: 2,657.30, 2,672.70 2,689.00