Gold Price Recovery Stalls Ahead of December High

gold_02
NA-meet-our-team-David-Song-125x125
By :  ,  Strategist

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.

Get our guide to central banks and interest rates in 2025

Join David Song for the Weekly Fundamental Market Outlook webinar.

 

US Economic Calendar

US Economic Calendar 01142025

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

Gold Price Daily Chart 01142025

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

Related tags: Gold Trade Ideas David Song

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar