Gold Price Recovery Stalls Ahead of December High

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

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.

This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.