- Gold prices held steady around $2,610 as the dollar continued to strengthen.
- The Federal Reserve has signaled lower interest rates next year, easing pressure on gold prices.
- XAU/USD is facing a bearish reversal as it tests support at the 100-day moving average.
Gold prices were steady around $2,611 as market participants grew more cautious about expectations for U.S. interest rates. The broad expansion suggests the dollar remains strong, supported by expectations that the Fed will slow the pace of rate cuts next year. Fed officials said the rate cut would be smaller than previously expected, with the federal funds rate expected to reach 3.9% by the end of 2025. Another explanation for the price. Also to be closely monitored is the December nonfarm payrolls data, due in the first week of January, with the labor market seen to play a significant role in the Fed’s decision. Despite these conditions, gold is still under pressure and cannot break out of its current position.
XAU/USD Technical Outlook
From a perspective, XAU/USD is facing a major problem. The price is still in the negative territory and signs point to weak energy. The pair is currently testing the 100-day simple moving average (SMA) support at $2,610, which has been a key level for gold in recent months. A move below this level could signal further downside potential, while a pullback could face resistance in the $2,650 to $2,670 range. Traders will be keeping a close eye on this support for any indication that the decline could reverse or continue.
