Gold Price Forecast: XAU/USD consolidated gains around $4,150
Gold (XAU/USD) was capped at the $4,175 area on Wednesday and is showing minor losses on Thursday, although it remains trading within the previous day’s range, with support around the $4,140 area holding downside attempts for now.The US Dollar Index (DXY) is showing a mild recovery after dropping ne
  • Gold treads water around $4,150 but maintains its bullish trend intact.
  • The US Dollar trims losses in a quiet Thanksgiving trading session.
  • Rising bets of Fed cuts are likely to underpin demand for Gold.

Gold (XAU/USD) was capped at the $4,175 area on Wednesday and is showing minor losses on Thursday, although it remains trading within the previous day’s range, with support around the $4,140 area holding downside attempts for now.

The US Dollar Index (DXY) is showing a mild recovery after dropping nearly 0.7% over the previous three days, which is weighing on Gold’s recovery. The precious metal is about 0.5% higher on the week, as growing hopes that the US Federal Reserve will cut rates further in December have sent US Treasury yields tumbling and the Greenback down with them

Technical Analysis: Bulls remain focused on the $4,245 level


Chart Analysis XAU/USD


The technical pìcture shows the broader bullish trend still in play with XAU/USD trading at $4,156. The Relative Strength Index (RSI) in four-hour charts prints 58.73, above the midline, suggesting buyers retain a modest advantage, while the Moving Average Convergence Divergence (MACD) eases toward the zero line with its latest reading near positive territory, hinting at fading bullish momentum.

Wednesday's highs at $4,175 are holding bulls for now, although the focus remains on the November 14 high, at $4,211, and the November peak, near $4,245.

On the downside, immediate support is seen at Wednesday's low of $4,140, ahead of the November 25 low, right below $4,110. A confirmation below here would cancel the bullish scenario and bring the November 20,21, and 24 lows, between $4,020 and $4,040, back into play.

(The technical analysis of this story was written with the help of an AI tool)

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

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