Gold nears key support at 100-day SMA/50% fibonacci amid USD strength
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Gold prices remain under heavy pressure, approaching critical support near $2,542-$2,538, where the 100-day SMA and 50% Fibonacci retracement converge. Strong USD momentum, driven by Trump’s expected expansionary policies and elevated US Treasury yields, continues to weigh on the yellow metal. Any break below this confluence could expose the $2,500 psychological level.
Gold Price Outlook: USD Strength Drives XAU/USD Towards Key Support Zone
Gold prices have reached their lowest levels since September, trading near $2,550 as the USD extends its rally, supported by optimism around US economic growth under President-elect Trump’s administration. Rising Treasury yields and persistent USD strength have weighed on gold for a fifth consecutive session, with the focus now shifting to the $2,542-$2,538 confluence support zone, which could determine the next directional move.
Factors Pressuring Gold Prices
USD and Treasury Yields:
Elevated US bond yields and a strong USD, bolstered by inflationary expectations from Trump’s fiscal policies, divert interest away from the non-yielding yellow metal. CPI data released Wednesday highlighted ongoing inflation concerns, reinforcing the likelihood of a December rate cut but limiting room for additional cuts in 2025. Technical Indicators and Key Levels:
Support: The immediate focus is on the $2,542-$2,538 zone, where the 100-day SMA and 50% Fibonacci level intersect. A decisive break below this could accelerate the sell-off, targeting the $2,500 psychological level. Resistance: Any recovery attempt may face resistance around $2,580, with stronger resistance at $2,600. A move above this level could lead to a short-covering rally toward $2,630-$2,632, with further potential upside toward $2,660. Outlook
With the USD maintaining its strength and the US economic docket featuring PPI, Jobless Claims, and Fed Chair Powell’s speech, gold remains vulnerable to further declines. Traders will closely monitor the $2,542-$2,538 support, as a breakdown here could trigger an extended bearish phase, while a hold may allow for a modest recovery attempt.
Gold Price Outlook: USD Strength Drives XAU/USD Towards Key Support Zone
Gold prices have reached their lowest levels since September, trading near $2,550 as the USD extends its rally, supported by optimism around US economic growth under President-elect Trump’s administration. Rising Treasury yields and persistent USD strength have weighed on gold for a fifth consecutive session, with the focus now shifting to the $2,542-$2,538 confluence support zone, which could determine the next directional move.
Factors Pressuring Gold Prices
USD and Treasury Yields:
Elevated US bond yields and a strong USD, bolstered by inflationary expectations from Trump’s fiscal policies, divert interest away from the non-yielding yellow metal. CPI data released Wednesday highlighted ongoing inflation concerns, reinforcing the likelihood of a December rate cut but limiting room for additional cuts in 2025. Technical Indicators and Key Levels:
Support: The immediate focus is on the $2,542-$2,538 zone, where the 100-day SMA and 50% Fibonacci level intersect. A decisive break below this could accelerate the sell-off, targeting the $2,500 psychological level. Resistance: Any recovery attempt may face resistance around $2,580, with stronger resistance at $2,600. A move above this level could lead to a short-covering rally toward $2,630-$2,632, with further potential upside toward $2,660. Outlook
With the USD maintaining its strength and the US economic docket featuring PPI, Jobless Claims, and Fed Chair Powell’s speech, gold remains vulnerable to further declines. Traders will closely monitor the $2,542-$2,538 support, as a breakdown here could trigger an extended bearish phase, while a hold may allow for a modest recovery attempt.