Gold Price Forecast: XAU/USD back below $4,100 amid resurgent USD demand

XAU/USD Current price: $4,066.90

• Resurgent US Dollar demand amid risk aversion limits Gold's bullish potential.
• Investors await the FOMC meeting minutes and NVIDIA earnings report.
• XAU/USD hovers around $4,065 with a modest bearish tilt.

Risk aversion dominates financial markets in the American session on Wednesday, resulting in a much firmer US Dollar (USD) across the FX board. In the case of XAU/USD, demand for safety benefits both Gold and the Greenback, keeping the pair afloat, though off its intraday high of $4,132.

Financial markets brace for United States (US) data and earnings reports, the latter focused on chip-maker NVIDIA, scheduled to report later in the day. As per the US, the Federal Open Market Committee (FOMC) will release the minutes of the October meeting, when US officials decided to cut the benchmark interest rate by 25 basis points (bps).

Still, Chairman Jerome Powell dropped a bomb by saying a December interest rate cut should not be taken for granted. Powell claimed that the lack of official macroeconomic figures would leave them without a clear framework for deciding on monetary policy. Indeed, the US federal government has remained shut down for 43 days, the longest in the country's history. Congress finally agreed on a funding bill last week, and President Donald Trump signed it last Wednesday, which means official delayed data is slowly reaching the macroeconomic calendar.

Back to the minutes, the document is expected to shed light on the reasoning behind policymakers' decisions, and could provide additional hints of what's next in monetary policy. The US government reopening and the upcoming data releases ahead of the December meeting, however, can overshadow the potential impact of the minutes.

The focus will quickly shift to US data after the release of FOMC minutes, with the September Nonfarm Payrolls (NFP) report scheduled for Thursday. The over two-month-old report is expected to show that the country added 50K new job positions in the month, while the Unemployment Rate is foreseen stable at 4.3%. The missed October report is likely to have a broader impact on the market's sentiment, yet there's no official release date.

XAU/USD short-term technical outlook

The near-term picture for XAU/USD is mildly bearish. In the 4-hour chart, the pair trades at $4,067.88, pretty much unchanged on a daily basis. The 20-period Simple Moving Average (SMA) slopes lower, converging with a 200-period SMA, both around $4,080, while barely above a flat 100-period SMA. The broader SMA configuration points to a consolidative bias, with the longer average acting as dynamic resistance and the intermediate one providing support. At the same time, the Momentum indicator turned lower, standing just below its midline, signaling waning buying interest. Finally, the Relative Strength Index (RSI) at 46 offers a neutral-to-bearish tone.

Technical readings on the daily chart suggest XAU/USD still has limited downside scope. The 20-day SMA holds above the 100- and 200-day measures but has flattened and edged lower, hinting at a pause within the broader uptrend. The 100- and 200-day SMAs continue to rise, reinforcing bullish control as price remains above all three. The 20-day SMA at $4,045.67 offers nearby dynamic support. Meanwhile, the Momentum indicator stands above its midline but has cooled, while the RSI hovers around 52, both of which signal a neutral-to-positive tone. A break below $4,045.67 would expose the 100-day SMA at $3,676.62 and the 200-day at $3,427.08.

(The technical analysis of this story was written with the help of an AI tool)