03.12.202413:09 Forex Analysis & Reviews: XAU/USD: Analysis and Forecast

Gold is trying to gain positive momentum today, but its upward potential remains constrained. Traders are awaiting additional signals from the Federal Reserve about the trajectory of rate cuts before positioning for the next phase of directional movement. As a result, attention is focused on key US macroeconomic data due this week, including Friday's Nonfarm Payrolls (NFP) report. Additionally, Federal Reserve Chair Jerome Powell's speech will be closely analyzed for insights into future rate reductions, which are expected to significantly impact gold's performance.

Technical Analysis

Mixed signals from oscillators on the daily and 4-hour charts indicate the need for caution before considering significant downside movements.

Upward Levels to Watch:

• Any move above the $2650 level is expected to encounter resistance. Last Friday's swing high, around $2666, marks the first key level.
• The next critical resistance level is near $2686, beyond which gold could target the key psychological level of $2700.

Downward Levels to Watch:

• Initial support is located at yesterday's low of $2621, followed by the $2605 level and the psychological threshold of $2600.
• A break below these levels could pave the way for further declines toward the 100-day Simple Moving Average (SMA).
• A decisive breach of the SMA would open the way for a deeper decline toward November's low.

Traders should exercise caution and monitor both macroeconomic developments and technical levels when forming positions in the gold market.