Gold Price Forecast: XAU/USD bears eye a run below trendline support


  • Gold Price is pressured and taking on a critical micro trend line. 
  • This leaves the bias on the downside while below $1,780/00 and a break of $1,702 open risk to $1,670.

The Gold Price is consolidated towards the lows of the US session range near $1,777.00. XAU/USD fell from a high of $1,808 to a low of $1,774 on Thursday due to a stronger US Dollar. 

''Gold fell amid the decline in investor demand,'' analysts at ANZ Bank said. ''Nevertheless, the global economy is at an inflection point. Tighter monetary policies amid high inflation are likely to slow economic growth in 2023. This backdrop is typically positive for gold,'' the analysts argued. 

''Synchronised rate hikes have weighed on gold in 2022. Although we expect the US fed funds rate to peak at 5%, a pause in rate hiking should turn market sentiment in favour of gold,'' the analysts forecast.

Fed sentiment weighs

On Wednesday, the Federal Reserve projected continued rate hikes to above 5% in 2023, a level not seen since a steep economic downturn in 2007. Due to the hawkish rate hike, investor fears have intensified that the Federal Reserve's battle against inflation using aggressive interest rate hikes could lead to a recession. This has filled a bid into the US Dollar. However, the analysts at ANZ Bank argue that ''we approach the end of US Dollar dominance, and a depreciation in the currency would add further support to investor demand.''

''With the Fed suggesting rates will remain high through 2023, the risk of weak economic growth next year. Gold prices tend to come under pressure ahead of recessions, but then outperform other markets (such as equities) during them,'' the analysts argued. 

On the flip side, analysts at TD Securities expect gold prices to be weighed down by trend follower short acquisitions, ''with prices already flirting with key triggers for several subsequent selling programs just below the $1785/oz mark. In turn, the bar is low for CTAs to add 7% of their maximum historical length to their short position in the yellow metal.''

Gold technical analysis

The price is on the backside of the bearish cycle and has been advancing through the various resistances higher in a short squeeze. If the bulls can get a close above $1,800, then there will be prospects for a continuation towards $1,850 and $1,880.

On the other hand, as illustrated below, zoomed in on the daily chart, the micro trendline was broken in today's bearish impulse. This leaves the bias on the downside while below $1,780/00 and a break of $1,702 open risk to $1,670:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to hold above 1.0400 as mood sours

EUR/USD struggles to hold above 1.0400 as mood sours

EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. In the absence of high-tier data releases, the cautious risk mood helps the US Dollar hold its ground and forces the pair to stretch lower. 

EUR/USD News
GBP/USD declines below 1.2550 on renewed USD strength

GBP/USD declines below 1.2550 on renewed USD strength

GBP/USD loses its traction and trades below 1.2550 in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as trading conditions remain thin heading into the Christmas holiday.

GBP/USD News
Gold drops to $2,620 area as US bond yields edge higher

Gold drops to $2,620 area as US bond yields edge higher

Gold struggles to build on Friday's gains and trades modestly lower on the day near $2,620. The benchmark 10-year US Treasury bond yield edges slightly higher above 4.5%, making it difficult for XAU/USD to gather bullish momentum.

Gold News
Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025. 

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures