Spot Gold Trading Update: XAU/USD Current Price Analysis
- Market Speculation: Dismal United States data sparks speculation of Federal Reserve rate cuts in 2025.
- ECB Rate Cut: European Central Bank cuts benchmark rates by 25 bps each, in line with expectations.
- Bearish Trend: XAU/USD turns bearish in the near term after breaking below $2,700.
Spot Gold is currently under selling pressure, trading around $2,680 per troy ounce. The US Dollar (USD) has gained momentum following the release of disappointing US economic data.
The recent report showed Initial Jobless Claims for the week ending December 6 increased to 242K, surpassing expectations of 220K and the previous 225K. Additionally, the November Producer Price Index (PPI) rose by 3.4% year-on-year, higher than the anticipated 3.2% and the previous 3.1%. These figures have led to increased speculation on potential Federal Reserve interest rate cuts in 2025.
Despite modest optimism at the start of the day, Wall Street has turned negative, reflecting overall poor sentiment. Interestingly, the USD has gained more attention as a safe haven compared to gold.
Looking ahead, market participants are gearing up for a quieter day as the macroeconomic calendar lacks significant events on Friday. However, attention will turn to upcoming monetary policy decisions from the Bank of Japan (BoJ), the Federal Reserve (Fed), and the Bank of England (BoE) next week, with a focus on potential policy changes in 2025.
XAU/USD Short-Term Technical Analysis
From a technical standpoint, the XAU/USD pair faces downside pressure in the short term. Despite this, the pair remains above key moving averages on the daily chart, with the 20 Simple Moving Average (SMA) maintaining an upward trend below the current price and above the bullish 100 and 200 SMAs. However, technical indicators have turned bearish, with the Momentum and RSI both pointing lower.
On the 4-hour chart, XAU/USD is trading below its 20 SMA, with technical indicators suggesting a potential continuation of the corrective decline. The Momentum indicator, however, remains above its 100 line.
Support Levels: 2,676.30, 2,662.50, 2,650.40
Resistance Levels: 2,693.70, 2,704.35, 2,722.60
Analysis:
Spot Gold (XAU/USD) is currently facing selling pressure due to disappointing US economic data, leading to speculation of potential Federal Reserve rate cuts in 2025. Despite initial optimism, market sentiment has turned negative, with the USD gaining favor as a safe haven asset over gold. With upcoming monetary policy decisions from major central banks, investors are closely watching for any hints of policy changes that could impact the financial markets. From a technical perspective, XAU/USD is showing signs of short-term weakness, with key support and resistance levels to monitor for potential price movements.