Gold (XAU/USD) Continues to Decline
Gold (XAU/USD) has declined for two consecutive days after reaching a high of 2,647-2,648 USD on Monday, surpassing the three-week high achieved on Friday. The main reason for the decline is the "hawkish" signal from the Federal Reserve (Fed), which indicated it would slow down interest rate cuts in 2025, driving up U.S. Treasury yields and causing funds to flow out of gold. Additionally, overall market optimism has reduced the demand for gold as a safe-haven asset.
However, the drop in the U.S. dollar (USD) from its highest level since November 2022, combined with geopolitical risks, has somewhat limited gold's decline. Traders may remain cautious, especially with key economic reports from the U.S., such as the Non-Farm Payrolls (NFP) report on Friday and the minutes from the December FOMC meeting on Wednesday. Looking at the technical chart, gold is trending lower and may break below its price channel, facing resistance at 2,660 USD. The next target for gold is likely to be below 2,590 USD. Moreover, the Exponential Moving Average (EMA) is also declining, reinforcing the possibility of gold continuing its downward trend in the short term. If gold fails to hold this level, it could further decline, with the next support levels around 2,570 and 2,540 USD.
However, if the market witnesses a recovery and gold moves back above 2,660 USD, a rebound towards 2,700 USD could occur. The situation will continue to depend on macroeconomic factors and investor sentiment, especially in light of the important economic data coming this week.
However, the drop in the U.S. dollar (USD) from its highest level since November 2022, combined with geopolitical risks, has somewhat limited gold's decline. Traders may remain cautious, especially with key economic reports from the U.S., such as the Non-Farm Payrolls (NFP) report on Friday and the minutes from the December FOMC meeting on Wednesday. Looking at the technical chart, gold is trending lower and may break below its price channel, facing resistance at 2,660 USD. The next target for gold is likely to be below 2,590 USD. Moreover, the Exponential Moving Average (EMA) is also declining, reinforcing the possibility of gold continuing its downward trend in the short term. If gold fails to hold this level, it could further decline, with the next support levels around 2,570 and 2,540 USD.
However, if the market witnesses a recovery and gold moves back above 2,660 USD, a rebound towards 2,700 USD could occur. The situation will continue to depend on macroeconomic factors and investor sentiment, especially in light of the important economic data coming this week.
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