Gold Outlook: XAU/USD Ends the Week Attempting to Return to All-Time Highs

Gold closed the week with four consecutive bullish sessions and a gain of more than 2%, as buying pressure attempts to consolidate once again in the market. For now, buying strength has begun to improve following this week’s Federal Reserve decision and the recent pullback in market confidence, allowing gold—as a safe-haven asset—to recover ground in the short term. If these dynamics persist, buying pressure may continue to dominate XAU/USD movements in the coming sessions.

Treasury Bonds Lose Ground

One of the most important central-bank decisions took place this week. The Federal Reserve stated that, due to the decline in economic activity and weakening U.S. employment over recent months, it was necessary to close the year with lower interest rates. The rate was cut from 4.00% to 3.75% in the decision announced on December 10.

Shortly afterward, Fed Chair Jerome Powell noted that no rate-hike environment is being considered for next year and that the outlook leans toward neutral or lower rates, as long as inflation remains moderate. This is already reflected in the CME Group probability models, showing a 75.6% chance of maintaining the rate at 3.75% for January 28, a 49.8% probability for March 18, and a 43.9% probability of an additional 0.25% cut for April.

Source: CMEGROUP

This updated stance leaves behind the scenario of high rates and shifts monetary policy toward a more dovish tone, which triggered renewed weakness in 10-year Treasury yields. Currently, yields ended the week near 4.1%, after trading close to 4.2% before the Fed announcement.

Source: TradingEconomics

In general, Treasury bonds are considered among the safest assets globally and often act as natural substitutes for gold. Therefore, when bonds begin offering lower yields, the market tends to see gold as a more attractive short-term refuge. This behavior is likely supporting consistent demand for gold, and if this bias continues, it could reinforce buying pressure in XAU/USD in the coming sessions.

 

Is Confidence Still Playing a Role?

Although gold has shown strong volatility through the second half of 2025, it remains a key global safe-haven asset, especially when market confidence deteriorates and risk appetite weakens.

Currently, overall market confidence remains negative. CNN’s Fear and Greed Index reports 42 points, still within “fear” territory. Despite a gradual attempt at recovery, confidence dipped again after the Federal Reserve decision.

Source: CNN

This behavior shows that confidence indicators remain fragile. Unless the index exits the fear zone and moves closer to neutral values, the environment will likely remain one of uncertainty, which could continue supporting safe-haven demand such as gold. Under this scenario, the metal may maintain relevant buying pressure in the short term.

 

Gold Technical Outlook

Source: StoneX, Tradingview

• Uptrend Remains Intact: For over three months, gold has sustained a consistent upward trendline. Recent bearish corrections have not been strong enough to break this structure, keeping the bullish trend as the most important technical element on the chart. However, as price approaches the highs, short-term bearish corrections may begin to emerge.
   

• RSI: In recent sessions, the RSI has remained above 50, indicating that buying momentum has dominated the past 14 periods. However, the indicator is approaching the overbought zone (70), which may signal an excess of buying strength, leaving room for short-term pullbacks.
   

• MACD: The MACD maintains a histogram oscillating above the zero line, suggesting that short-term moving-average strength continues to lean toward the bullish side. If the histogram continues rising, it may support a more robust bullish tone in the next sessions.
   

Key Levels to Watch:

• 4,382 USD – Critical Resistance: This level corresponds to gold’s all-time highs and represents the most important bullish barrier. A return to this zone could activate a dominant bullish bias into the year’s end and extend the current uptrend.
   
• 4,244 USD – Nearby Barrier: A short-term neutrality zone observed recently. It may act as an initial barrier against potential bearish corrections.
   
• 4,127 USD – Critical Support: The most important psychological level on the chart. It aligns with the 23.6% Fibonacci retracement and the 50-period moving average. A break below this area would put the uptrend at risk and could trigger a more aggressive bearish bias, potentially leading to a new short-term downtrend.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him at: @julianpineda25