Gold Price Forecast: XAU/USD to challenge fresh record highs

XAU/USD Current price: $4,475

• The US economy grew faster than anticipated in the third quarter.
• Consumer Confidence in the United States fell for a fifth consecutive month.
• XAU/USD flirted with $4,500, maintaining its positive momentum despite overbought.

Gold price soared to a fresh all-time high on Tuesday, trading at $4,497 a troy ounce during European trading hours as market players kept dropping the US Dollar (USD). The bright metal also found favor in Middle East tensions, following weekend headlines indicating Israel is considering resuming its war with Iran.

The USD, however, found some near-term footing at the beginning of the American session after the release of mixed United States (US) data. The ADP Employment Change 4-week average showed that the private sector added an average of 11,500 jobs per week, in the week ending December 6, slightly below the previous 16,250 but still positive. Additionally, the Q3 Gross Domestic Product (GDP) reported annualized growth of 4.3% in the three months to September, well above the previous 3.8% and the expected 3.3%. On a negative note, the GDP Price Index, a measure of inflation, jumped from 2.1% to 3.7%.

The country also reported that Durable Goods Orders fell 2.2% in October, a worsening from the 0.7% advance posted in September. Finally, CB Consumer Confidence in December edged lower for the fifth consecutive month, declining to 89.1 from 92.9 in November.

Most countries celebrate Christmas, which means there won’t be any macroeconomic releases to worry about in the coming days. Japan is the only exception, releasing some interesting figures, including Tokyo Consumer Price Index (CPI) data, next Friday.

XAU/USD short-term technical outlook

The XAU/USD fell towards the $4,450 region with the headlines, but resumed its advance after the dust settled, and trades around $4,480 at the time of writing.

Technically, the 4-hour chart shows XAU/USD trades at $4,474.84, holding on to modest intraday gains. The 20-, 100-, and 200-period Simple Moving Averages (SMAs) are bullish, with the price holding above all three, usually indicating that bulls maintain the lead. The 20 SMA near $4,398.04 offers nearby dynamic support. At the same time, the Momentum indicator eased but holds well above its midline, while the Relative Strength Index (RSI) indicator stands at 70. With the Momentum still positive and the RSI stretched, consolidation could precede another leg higher. A sustained push from current levels would extend the uptrend, while a pullback that holds above the cited SMAs would keep the bullish structure intact.

In the daily chart, XAU/USD trades far above an ascending 20-day SMA, with the latter developing above the 100- and 200-day SMAs. Price holds above all three, with the 20-day SMA at $4,267.83 providing nearby support and the 100-day SMA at $3,891.93 anchoring the trend. Finally, the Momentum indicator advances above its midline, while the RSI indicator at 80 barely decelerated its advance.

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