Gold Price Forecast: XAU/USD Slips $47 From Record $4,526 as Christmas Pause Hides Next Break
Gold prices took a gentle breather at the end of year as they slipped from a fresh all-time high near $4,526 to settle around $4,479...
Quick overview
- Gold prices eased slightly from a record high of $4,526 to around $4,479 as markets closed for the holidays.
- Investor sentiment remains cautious, indicating a pause in gold's rally rather than a full reversal.
- The US dollar struggled to recover, with low interest rate expectations keeping investors focused on gold as a safe haven.
- Upcoming Japanese economic data could influence market sentiment and potentially benefit gold if the results are disappointing.
Gold prices took a gentle breather at the end of year as they slipped from a fresh all-time high near $4,526 to settle around $4,479 – the last trade before markets shut for Christmas. When they do reopen, Wednesday’s close will be the one investors are looking at. And until then, not much will be happening because everyone will be taking a well-deserved holiday break.
Although the drop was enough for some to breathe a sigh of relief, gold’s price action looks more like it’s just pausing for breath after a mighty rally, rather than the start of a full-on reversal. Investor sentiment remains on the cautious side of cautious, which says it all about where global markets are at the moment.
Dollar’s Weakness Continues and Fed Bets Win Out
The US dollar made a half-hearted attempt to bounce back from its weakest level since early October, but it didn’t last long. Investors still think the Federal Reserve will keep interest rates low, which is preventing the dollar from really gaining any traction.
Lower returns on bonds and the possibility of even lower interest rates in the future mean that investors are sticking with gold. Even when the dollar stabilised, there was no sign of anyone panicking and selling gold, which adds to the metal’s resilience near record highs.
Tensions Elsewhere Keep Gold in the Spotlight
With tensions worldwide running high, investors are sticking with gold as a safe haven. They’re not getting out of it, which is good news for the metal.
The spotlight is now on Japanese economic data coming out on Friday, which will give us a clue about the mood of the markets when they reopen:
- Tokyo Core CPI: expected to drop to 2.5%, from 2.8%
- Unemployment Rate: the same as last time, 2.6%
- Industrial Production: forecast to fall 1.9%
- Retail Sales: expected to come in at 0.9%
But if the numbers are really bad, it could start to worry investors about the state of the global economy, and that would be good for gold.
Gold Technical Analysis: Where Gold Stands After the Holidays
On the 4-hour chart, gold is stuck just below $4,525 and still in a well-defined ascending trend channel. The trend is still intact, even if gold has had a brief wobble.
Here are the levels to keep an eye on:
- Support: anywhere around $4,450–$4,445, then $4,385 (that’s the 50-EMA)
- Deeper support: then $4,317 (the 100-EMA)
- Resistance: $4,525 first, then $4,567
- Channel target: maybe round $4,600
The recent price action looks like a pause, rather than a major sell-off. The RSI has taken a breather and is not overbought or anything like that.
Trade idea: you might want to look at buying near $4,450, stop-loss just below $4,385, and then aiming for $4,525–$4,600 once the markets fully open again.
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