Article by: ETO Markets
Gold prices (XAU/USD) are struggling to maintain momentum after rebounding from the $… region, trading in a narrow range during Tuesday's Asian session. This is largely due to a stronger US Dollar (USD), supported by expectations of a less dovish Federal Reserve (Fed) stance, which dampens demand for the non-yielding asset. However, geopolitical uncertainties, including US President-elect Donald Trump's tariff plans and the potential for renewed global trade tensions, provide some support for the safe-haven commodity. Suppressed US Treasury bond yields further limit downside risks for gold. Investors are hesitant, awaiting clearer signals regarding the Fed's rate-cut path, with a focus on this week’s US macroeconomic releases, particularly the Nonfarm Payrolls (NFP) report on Friday, and Fed Chair Jerome Powell’s speech, both of which could shape near-term USD dynamics.
From a technical perspective, the 50% Fibonacci level serves as a critical pivot point of gold price (XAU/USD). Amid market uncertainty and trader hesitance, gold prices are hovering around $… (the 50% Fibonacci level). A break below the 38.2% Fibonacci level at $… could signal a bearish outlook, potentially leading to a drop toward last week's swing low at $…. Further selling pressure below $… might expose the 100-day SMA near $…. On the other hand, if buying momentum persists, gold could rise to the $… area (the 61.8% Fibonacci level). A sustained rally beyond this hurdle might push prices past $…, with the $… zone acting as a key level to confirm a reversal of the sharp decline on November 25.
