Gold (XAU) maintained a positive tone on Monday, supported by US dollar weakness following the PCE report. However, the price continues to struggle to recover from last week’s sharp decline. Softer inflation data provided a brief boost to gold, but the Federal Reserve’s hawkish outlook has limited further gains. Moreover, stronger US GDP growth and lower-than-expected unemployment claims have reinforced expectations of tighter monetary policy in 2025. Consequently, gold prices remain stable, reflecting cautious optimism amid changing economic conditions.
Gold (XAU) Technical Analysis
Gold day chart – price uncertainty
The daily chart for gold shows the price consolidating within wide ranges in December. Despite this consolidation, the market remains bullish as the price trades above the red-dotted trendline. Following the release of US PCE data on Friday, the price closed above the 100-day SMA, reinforcing the bullish trend.
However, low liquidity this week could keep gold in a tight consolidation. The bullish trend is intact as long as the price remains above the $2,500 zone and any price correction is considered a buying opportunity. However, the short-term direction remains uncertain due to the December holidays, which result in limited liquidity.