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Capped at 4500! Can Gold Extend Gains?
Forex
Economic
Summary:
Strong US GDP data may also weigh on gold prices. Notably, robust GDP growth typically boosts the US dollar, raising the cost of gold for non-US buyers and thus exerting downward pressure on gold prices.
Sell
CLOSEDXAUUSD
End Time
4505.00
Entry Price
4100.00
TP
4600.00
SL
4473.45 -59.89 -1.32%
1371
Points
Profit
4100.00
TP
4491.29
CLOSING
4505.00
Entry Price
4600.00
SL
Fundamentals
A confluence of factors has spurred investors to flock to gold as a safe-haven asset. "Looking ahead to 2026, it is critical to distinguish short-term market optimism from long-term financial security. While the recent equity rally points to stronger investor risk appetite, the sharp gains in gold and silver tell a different story: global uncertainties remain," El-Khal noted.
"For central banks and large institutions, traditional safe-haven assets like precious metals remain the primary defense against geopolitical tensions and currency depreciation. When genuine stress impacts the financial system, markets will still turn to physical assets, which continue to anchor global financial stability."
Mounting market expectations for further Fed rate cuts next year are set to lift gold prices.
Amid slowing inflation and tepid job growth, the market expects multiple Fed rate cuts in 2026. Lower rates will reduce the opportunity cost of holding gold, thus bolstering the price of this non-yielding precious metal.
Goldman Sachs recently set its 2026 year-end gold price target at $4,900 per ounce, citing factors including ramped-up central bank purchases and broader portfolio diversification into gold by investors.
Data released by the U.S. Bureau of Economic Analysis (BEA) on Tuesday showed that the U.S. GDP expanded at an annualized rate of 4.3% in Q3, beating the prior estimate of 3.3% and following a 3.8% growth in Q2. The Conference Board's consumer confidence index fell to 89.1 in December from 92.9 in November.
U.S. President Donald Trump stated on Tuesday that he expects the Fed Chair to cut rates if the economy remains strong, noting the next Fed chief must be someone who slashes rates "substantially". He implied that any candidate opposing this stance would be disqualified for the post, a remark that may fuel investor and policymaker concerns over the Fed's independence.
Financial markets are likely to stay sluggish heading into the Christmas holiday. As reported by CNBC, White House advisor Kevin Hassett said the Fed's pace of rate cuts remains too slow, despite the far better-than-expected Q3 economic growth.
Traders are awaiting the U.S. initial jobless claims data due late Wednesday for fresh market momentum. The market widely forecasts 223,000 claims in the week ending December 13, down from the prior 224,000.
Technical Analysis
On the 4-hour timeframe, gold's Bollinger Bands are opening upward with MAs diverging higher, confirming an intact bullish trend overall. The candlestick forms a long upper shadow, indicating heavy short-term resistance overhead. After a MACD golden cross, upside momentum has weakened, with the MACD lines on the verge of a death cross. A confirmed death cross will likely pull prices back to around the Bollinger Middle Band at 4400 and the EMA50 at 4370. The RSI stands at 67, keeping the market in bullish territory, with key resistance levels at 4500 and 4550.
On the 15-minute timeframe, price is oscillating along the Bollinger Middle Band. As long as 4530 holds as resistance, intraday prices are set to retrace toward the EMA200 around 4460. A brief break above the upper Bollinger Band may occur prior to the pullback, as the market forms a head and shoulders top pattern. Meanwhile, the RSI is at 43, signaling bearish near-term sentiment. Therefore, traders are recommended to short first, and then long.
Trade Recommendations
Trade Direction: Sell
Entry Price: 4505
Target Price: 4100
Stop Loss: 4600
Support: 4200/4100/3800
Resistance Levels: 4530/4550/5000
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