Gold Price Recovery Stalls Ahead of December High
The recovery in the price of gold seems to have stalled ahead of the December high ($2726) as it no longer carves a series of higher highs and lows.
Share this:
Gold Price Outlook: XAU/USD
The recovery in the price of gold seems to have stalled ahead of the December high ($2726) as it no longer carves a series of higher highs and lows.
Gold Price Recovery Stalls Ahead of December High
The price of gold may struggle to retain the advance from the monthly low ($2615) as the 256K rise in US Non-Farm Payrolls (NFP) curbs expectations for lower US interest rates, and speculation surrounding US monetary policy may influence bullion as it serves as an alternative to fiat currencies.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
US Economic Calendar
In turn, the update to the US Consumer Price Index (CPI) may sway the precious metal as the headline reading is expected to increase to 2.9% in December from 2.7% per annum the month prior, while the core rate is seen holding steady at 3.3% during the same period.
Signs of persistent price growth may push the Federal Reserve to pause its rate-cutting cycle amid the ongoing expansion in employment, and the central bank may further adjust its forward guidance as the ‘median participant projects that the appropriate level of the federal funds rate will be 3.9 percent’ at the end of 2025 compared to the 3.4 percent forecast at the September meeting.
With that said, gold may continue to trade within the confines of the November range as it holds below pre-US election prices, but the threat of a policy error by major central banks may keep bullion afloat as it serves as an alternative to fiat currencies.
XAU/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView
- The recent recovery in the price of gold may unravel as it appears to be reversing ahead of the December high ($2726), with a close below $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) zone bringing the monthly low ($2615) on the radar.
- Next area of interest comes in around $2590 (100% Fibonacci extension), but the price of gold may face range bound conditions should it hold above the December low ($2584).
- Need a breach above the monthly high ($2698) to bring the December high ($2726) on the radar, with a break/close above the $2730 (100% Fibonacci extension) opening up the November high ($2762).
Additional Market Outlooks
EUR/USD Vulnerable Amid Push Below January Opening Range
Australian Dollar Forecast: AUD/USD Halts Four-Day Selloff
USD/JPY Pulls Back to Keep RSI Below Overbought Zone
US Dollar Forecast: USD/CHF Climbs Towards 2024 High
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Gold Outlook: Fed credibility takes a hit, but buyers aren't biting
The Fed's inflation-fighting credibility takes another knock, real yields are falling and the dollar is softening. Gold should be flying, yet buyers remain reluctant. What's going on?
Gold Bounces from $4k – Are Bears Finished?
Gold has so far bounced from the $4k level following last week’s sell-off but whether a low is in-place will highly depend on how the Central Bank meetings remaining on the calendar for the rest of this week roll out.
DAX forecast: AI optimism offers relief ahead of central bank meetings
The DAX is finding some relief from the recent improvement in risk appetite, with investors becoming less concerned about the sustainability of the AI trade
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.