Gold Closes at $2,648: A Week Ahead Amid Fed Meeting and Rising Bond Yields
Gold (XAU/USD) closed the week at $2,648, extending its losing streak as rising US Treasury yields and a strong US dollar weighed heavily on the precious metal.
The 10-year Treasury yield climbed to 4.375%, while the US Dollar Index (DXY) held firm near 107.05, limiting gold’s upside. Despite its recent decline, gold posted a modest weekly gain of 1%, supported by mixed US economic data and market anticipation ahead of the Federal Reserve’s upcoming meeting.
The Producer Price Index (PPI) for November rose by 3% year-over-year, with core PPI at 3.4%, both exceeding forecasts. Meanwhile, Initial Jobless Claims increased to 242K, signaling a cooling labor market. However, the strong dollar and rising real yields have continued to exert pressure on gold prices.
A Week Ahead: Fed Decision Looms Over Gold
Investors are focused on the Federal Reserve’s meeting on December 17-18, where a 93% chance of a 25-basis-point rate cut is expected, according to CME’s FedWatch tool. Markets will look to Fed Chair Jerome Powell for signals about the 2025 policy path, which could set the tone for gold’s next move.
Adding to gold’s challenges, geopolitical developments such as reports of a potential Gaza ceasefire have reduced safe-haven demand. Key data points in the coming week, including Retail Sales, Industrial Production, and the core PCE Price Index, could also shape the outlook for the yellow metal.
Technical Analysis: Gold’s Pivotal Levels
Gold closed near the $2,657 pivot, with immediate downside risk targeting $2,634.65. A break below this level could push prices toward $2,613.96 and $2,591.17. On the upside, the 50-day Exponential Moving Average (EMA) at $2,678.79 serves as the first resistance, followed by key levels at $2,690.80 and $2,726.63.
The Relative Strength Index (RSI) closed at 36.37, suggesting oversold conditions and potential for a rebound. However, sustained bearish sentiment, driven by strong yields and a resilient dollar, may cap any recovery unless gold reclaims critical resistance levels.
Key Insights:
Weekly Close: $2,648, with a 1% weekly gain despite recent losses.
Immediate Resistance: $2,678.79; clearing this could target $2,690.80.
Immediate Support: $2,634.65; a break risks further declines to $2,591.17.
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