On the other hand, gold (XAU) prices have struggled in this environment, pushing losses below $2,600. Higher US yields and a stronger dollar have limited gold’s recovery potential, adding to downward pressure. The Federal Reserve’s aggressive outlook and resilient economic data have boosted the dollar’s attractiveness while weighing heavily on gold. These dynamics suggest that gold’s near-term recovery will remain limited unless there is a significant shift in economic conditions or monetary policy expectations.
Gold (XAU) Technical Analysis
Gold daily chart – double top
The daily chart for gold shows that the price has consolidated above the red-dotted trendline over the past three months. A price correction on the red-dotted trend line has led to a strong recovery in the past. The price is also supported by the 100- and 200-day SMAs, which support bullish momentum in the gold market.
However, the decline following the Federal Reserve’s interest rate decision broke the black trendline and formed a double top at the $2,720 resistance level. This break also pushed the price below the 100-day SMA, signaling a possible move towards the $2,550 zone. A break below $2,550 would likely create bearish momentum in gold. December price patterns can be unreliable due to limited market liquidity. A decisive break above $2,720 is needed to reactivate bullish momentum in gold.