Gold Price Recovery Eyes December High

Gold Price Outlook: XAU/USD

The price of gold may attempt to further retrace the decline from the December high ($2726) as it extends the series of higher highs and lows from the start of the week, but bullion may face range bound conditions as the 50-Day SMA ($2650) no longer reflects a positive slope.

Gold Price Recovery Eyes December High

The price of gold extends the rebound from the weekly low ($2615) to stage a three-day rally, and the threat of a policy error by major central banks may keep precious metal afloat as it serves as an alternative to fiat currencies.

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US Economic Calendar

In turn, developments coming out of the US may sway the price of gold as the US Non-Farm Payrolls (NFP) report is anticipated to show a 160K rise in December compared to the 227K expansion the month prior, and signs of slower job growth may encourage the Federal Reserve to further unwind its restrictive policy as ‘the median participant projects that the appropriate level of the federal funds rate will be 3.9 percent’ at the end of 2025.

With that said, gold may continue to hold below pre-US election prices as the Fed keeps the door open to implement lower interest rates, but a higher-than-expected NFP print may fuel the recent rebound in bullion should it boost speculation of a policy error.

XAU/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView

• The price of gold may attempt to test the December high ($2726) as it carves a series of higher highs and lows, with a break/close above the $2730 (100% Fibonacci extension) bringing the November high ($2762) on the radar.
• A breach above $2790 (50% Fibonacci extension) opens up $2850 (61.8% Fibonacci extension), but failure to a break/close above the $2730 (100% Fibonacci extension) may keep the price of gold within the November range.
• Lack of momentum to hold above the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) zone may push the price of gold back towards $2590 (100% Fibonacci extension), with the next area of interest coming in around the December low ($2584).

Additional Market Outlooks

US Dollar Forecast: USD/CAD Stages Three-Day Rally

EUR/USD Weakness Brings January Opening Range in Focus

US Non-Farm Payrolls (NFP) Report Preview (DEC 2024)

USD/JPY Clears December High Ahead of US NFP Report

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong