Gold Price Forecast: $4,550 Pullback Sparks 2026 Rate-Cut Bets
Gold kicked off the week in a softer mood, easing back from record highs near $4,550 seen during early trading in European markets...
Quick overview
- Gold prices eased from record highs near $4,550 as traders locked in profits amid thin liquidity ahead of the New Year holidays.
- Despite a strong performance in 2025, a rebound in the US dollar and mixed economic data capped gold's upside.
- Expectations for further US rate cuts are supporting gold, as lower interest rates make it cheaper to hold non-yielding assets.
- Technically, gold remains in a bullish trend, with key support levels around $4,470-$4,480 and resistance at $4,550.
Gold kicked off the week in a softer mood, easing back from record highs near $4,550 seen during early trading in European markets as they came back to life after the weekend. Liquidity was running on the thin side due to the looming New Year holidays, and with short-term traders already having racked up some serious gains after such an incredible run, many were choosing to lock in their profits.
Gold had already seen a near 70% rise in 2025 – its strongest annual performance since 1979 – which, as you might expect, naturally brings its fair share of pauses in its progress. A rebound in the US dollar also knocked some of the steam out of gold’s market, as a stronger dollar makes gold more expensive for buyers outside of the US and can curb short-term demand. As a result, the XAU/USD price slipped towards $4,513, but this looks more like consolidation than a full-blown reversal.
Dollar Strength and Data Shape Near-Term Moves
Last week’s US data was a mixed bag – Initial Jobless Claims did come in lower than expectations at 214,000, which is good news for the dollar and helped cap gold’s upside.
On the flip side, though, there is more than a little investor caution around right now. Many markets are running on reduced holiday hours, so fresh positioning is limited, and many players are waiting for more clarity before taking on big trades. Even though the dollar was up, people remain cautious.
The bigger picture, though, remains supportive for gold. Safe-haven demand hasn’t gone anywhere, especially as the world is still dealing with geopolitical uncertainty, and questions around US policy direction are still very much up in the air.
Fed Rate-Cut Bets Continue to Underpin Gold
Looking beyond the holidays, expectations for US monetary policy remain a key driver of gold. The Federal Reserve has already cut rates three times this year, and markets are increasingly pricing in the possibility of two more cuts in 2026. According to CME FedWatch, there’s about an 18% chance of another cut as early as January.
Lower interest rates make it cheaper to hold non-yielding assets like gold, helping them retain their value when prices are falling. And on top of that, we’ve also got ongoing commentary questioning the Fed’s independence, which adds extra uncertainty to the mix – something that gold has historically handled pretty well.
Gold (XAU/USD) Technical Outlook – Bulls Still in the Game
From a technical standpoint, gold is still trading around $4,502 and has a nice rising trend on the 4-hour chart. The 50-day EMA at $4,423 and the 100-day EMA near $4,349 are both still trending higher, which is good for the medium-term bull case.
Some key levels to keep an eye on are:
- Support: around $4,470-$4,480, then $4,430
- Resistance: $4,550, then $4,600
The RSI is sitting at 59, which suggests that momentum has cooled off a bit from its overbought levels, but its still not looking too bearish.
Trade idea: Buyers might be looking for a pullback towards $4,470, with a view to targeting $4,600 and keeping an eye on the risks below $4,430.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save