Gold Weekly Forecast: XAU/USD poised to challenge record highs
- The Federal Reserve trimmed the benchmark rate for the third time in the year in December.
- United States employment and inflation data to set the US Dollar direction ahead of year-end.
- XAU/USD is technically bullish and could overcome its record high in the upcoming days.
Gold prices added roughly 3% in the week, flirting with the $4,350 mark on Friday, to finally settle at around $4,330. Despite its safe-haven condition, the bright metal rallied in a risk-on scenario, amid broad US Dollar (USD) weakness.
Gold appreciates as investors bet against the Fed
The Federal Reserve (Fed) announced a 25 basis points (bps) interest rate cut at its last 2025 meeting, reducing the Federal Funds Target Range (FFTR) to 3.50–3.75%, as expected. Out of the 12 voting members, Stephen Miran argued for a 50 bps cut, while Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, and Austan Goolsbee, president of the Federal Reserve Bank of Chicago, preferred to keep it unchanged.
The decision came with a fresh Summary of Economic Projections (SEP) and the usual Chairman Jerome Powell press conference. Officials revised the median 2026 projection in real GDP growth to 2.3% vs. 1.9% in the September SEP. Inflation is expected to be 2.0% in 2027 vs. 1.9% in September, and 1.9% in 2028 vs. 1.8% projected in September. Regarding employment, projections remained unchanged, while the 2028 estimate was down to 4.2% from 4.3%. Also, Core PCE inflation is now expected to finish 2025 at 3.0%, ease to 2.5% in 2026, to 1% in 2027 and to 2.0% in 2028. Finally, policymakers foresee one rate cut in 2026 and another one in 2027
Powell’s presser revolved around the Fed’s dual mandate: the Chair highlighted that policymakers are juggling to bring inflation down while avoiding unnecessary damage to the labour market. However, he also added that the economy is not overheated and that rate hikes remain off the table.
Market players took some time to assess the mixed announcement, but ended up betting against the Fed: investors expect at least two interest rate cuts in 2026, which led to renewed optimism. High-yielding assets rallied to the detriment of the Greenback. Safe-haven Gold also gained on broad USD weakness.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.23% | 0.22% | -0.01% | 0.18% | 0.14% | 0.09% | |
| EUR | -0.06% | 0.17% | 0.16% | -0.07% | 0.11% | 0.08% | 0.04% | |
| GBP | -0.23% | -0.17% | -0.02% | -0.24% | -0.06% | -0.09% | -0.14% | |
| JPY | -0.22% | -0.16% | 0.02% | -0.20% | -0.02% | -0.07% | -0.11% | |
| CAD | 0.01% | 0.07% | 0.24% | 0.20% | 0.18% | 0.14% | 0.10% | |
| AUD | -0.18% | -0.11% | 0.06% | 0.02% | -0.18% | -0.04% | -0.08% | |
| NZD | -0.14% | -0.08% | 0.09% | 0.07% | -0.14% | 0.04% | -0.05% | |
| CHF | -0.09% | -0.04% | 0.14% | 0.11% | -0.10% | 0.08% | 0.05% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
US employment data in focus
Meanwhile, the United States (US) released some relevant employment figures. On the one hand, the ADP Employment Change 4-week average showed that the private sector added an average of 4,750 jobs per week in the four weeks ending November 22, better than the previous three negative readings.
Also, the number of job openings on the last business day of September stood at 7.658 million, while for October it rose to 7.67 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday.
Finally, the country released Initial Jobless Claims for the week ended December 6 on Thursday, which unexpectedly jumped to 236K from 192K in the previous week. The reading also surpassed the 220K expected, fueling speculation that the Fed will have to deliver at least two rate cuts in 2026, and hence, further pressuring the US Dollar.
Focus on US first-tier data
In the upcoming days, the US macroeconomic calendar will be quite busy, with employment and inflation figures taking centre stage. Fed speakers will return to the scenario, most likely with hawkish messages. S&P Global will release the preliminary estimates of the December Purchasing Manager’s Indexes (PMIs) on Tuesday. On the same day, the country will release October Retail Sales, expected to rise modestly by 0.3%, and the November Nonfarm Payrolls (NFP) report, which will also include some of the missing October data.
On Thursday, it will be the turn of another weekly unemployment report and fresh Consumer Price Index (CPI) figures. Given that employment and inflation updates will follow and not precede the Fed’s decision, there’s a good chance that such numbers will result in increased volatility ahead of the winter holidays in the northern hemisphere. In the current scenario, and if employment-related figures hint at persistent weakness, the USD is likely to end the year on the back foot.
XAU/USD technical outlook
In the weekly chart, XAU/USD trades near its recent high and has room to extend its advance. The 20-week Simple Moving Average (SMA) heads north almost vertically, well below the current level, while above the 100- and 200-week SMAs, underscoring a robust bullish trend. Price holds well above its key averages, and the 20-week SMA at $3,838.86 offers critical dynamic support. At the same time, the Momentum indicator remains above its midline but lost its upward strength, reflecting a modest loss of speed after recent gains. Finally, the Relative Strength Index (RSI) stands at 75, yet without suggesting upward exhaustion. The bullish bias could suffer if the pair returns to levels below $4,250, yet for the most part, the pair is likely to retest record highs.
Taking a look at the daily chart, XAU/USD is bullish, yet likely to enter a consolidative stage. The 20-day SMA climbs above the 100- and 200-day SMAs as all three trend higher, underscoring a firm bullish bias. The shorter SMA provides dynamic support at around $4,172. Technical indicators have reached overbought territory and partially lost their upward strength, hinting at a potential corrective decline in the upcoming sessions. Still, the broader uptrend prevails, with speculative interest likely to push the bright metal towards the $4,380 region and beyond.
(The technical analysis of this story was written with the help of an AI tool)
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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.
