Gold Price Forecast: XAU to Extend Rally Toward $4,320 as Bulls Hold Channel Support

Quick overview

Gold (XAU/USD) gave back some of its early European gains after touching a high of $4,285, its strongest level since October 21st – that’s a significant number. A bit stronger tone in global equities pulled some money out of safe assets, while a mild pop in the dollar gave it a short-term kick against gold. Still, expectations that the Federal Reserve will keep interest rates low are really helping gold out.

Dovish Fed Keeps the Floor Under Gold

Gold’s trend remains strong overall, even after a dip. The Fed’s decision to cut rates by a quarter point on Wednesday, along with its cautious tone about the job market, has really led traders to expect more easing next year, which is suitable for gold. Now people are pricing in not one but two interest rate cuts in 2026, which is keeping the dollar on the back foot and still supporting demand for metals. No major US data drops today, but the market is still sensitive to what the Fed is saying and where risk appetite is headed.

Geopolitical Tensions Limit Downside

But there’s still all this uncertainty around the world that’s making people want to reach for gold. Talks between Russia and Ukraine are not going anywhere, and just recently, the White House sounded pretty frustrated that things aren’t moving faster. All of this is still helping to keep gold steady, even when equities are doing well.

Gold Technical Outlook

Gold is currently at $4,291 and is basically hugging the top of the channel that’s been guiding price action since late November. When you look at the charts, you can see that the price is closing higher each day, and there’s not much selling on the way down, which suggests people are buying in a controlled way. The 50-day and 100-day moving averages are both being respected – that’s a pretty stable bullish picture.

Resistance is right at $4,321 – that’s the top of the channel. If price breaks above that, it could open the door to a move up to $4,371, where there was some supply earlier.

Right now, the RSI is at 68 – that’s pretty strong momentum, but it also suggests the market could be getting overbought, which might slow the rate of gains.

If there is a pullback, the first place to look for support is at $4,268, then the mid-channel line at $4,219. A deeper drop towards $4,173 is consistent with the overall uptrend, as long as the price still respects the bottom of the channel. Gold is likely to keep going up unless the broader price structure breaks down.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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