XAU/USD caught a bid on a quiet Tuesday. It rose back to $2,625.00 per ounce after quickly bouncing off the $2,600 handle at the start of the week. Markets have been trading within small ranges during most of the holiday season. That’s because investors are taking a break for the year and waiting for fundamental drivers to start the next phase of market activity.
Gold’s Yearly Performance
Investors had a good time in 2024 as global markets went up due to a strong tech rally powered by AI. Equity indexes reached record highs. Gold also did very well, climbing 40.61% from its lowest to highest point and hitting record highs above $2,790 in October. Even though it dropped sharply in November, XAU/USD has closed higher or even for all but two of the past eleven months.
Relationship with US Dollar
Gold’s upward momentum stopped just before reaching $2,800 when the US Dollar hit its lowest point in 2024’s market action. This shows the inverse relationship between the two assets is still strong. A change in the US Dollar Index (DXY) could lead to a new rise in bids for XAU/USD. On the other hand, inconsistent policy from incoming US President Donald Trump could disappoint investors who hope for a continued rally into 2025. That could make the Greenback rise on risk-off flows and pull Gold prices down.
XAU/USD Price Forecast
Current Situation
XAU/USD is firmly holding above $2,600 during the holiday season. But buyers are having trouble getting past the 50-day Exponential Moving Average (EMA) which is moving towards $2,635. Bids are staying above the last swing low at around $2,560, but it seems unlikely that it will reach December’s peak just over $2,720 in the near term.
Technical Levels
The immediate technical floor if it moves lower is set by the 200-day EMA near $2,485. Meanwhile, buyers will be hoping for a full recovery to reach and go past the $2,800 level.
Related topics：
