- The price of Gold showed some oversold signs but only a valid breakout above the downtrend line could signal a new swing higher.
- The weekly pivot point stands as an upside obstacle.
- In the short term, XAU/USD could move sideways trying to attract more buyers.
Our gold forecast sees the precious metal trading in the red at the time of writing as the Dollar Index climbed higher after registering a minor retreat. XAU/USD rebounded in the short term, but the pressure remains high.
The yellow metal could come back down towards the previous lows. Still, Gold signalled that the downside could be over soon and that the buyers could take the lead.
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3 Free Forex Every Week – Full Technical Analysis
Gold bounced back as the United States Non-Farm Employment Change disappointed on Friday. The indicator was reported at 210K in November compared to 553K expected and versus a revised 546K in October. Also, the Average Hourly Earnings registered only a 0.3% growth versus 0.4% expected.
Despite these poor US figures, the Dollar Index maintains a bullish bias. Also on Friday, the ISM Services PMI registered an unexpected growth from 66.7 points to 69.1 points, even if the specialists expected a potential drop to 64.9, while the Unemployment Rate dropped from 4.6% to 4.2% far below 4.5% expected.
Tomorrow, the Reserve Bank of Australia will publish its Cash Rate which is expected to be left unchanged at 0.10% in the December meeting. Still, the RBA Rate Statement could have a big impact on Gold. Also, the Euro-zone ZEW Economic Sentiment and the German ZEW Economic Sentiment could shake the markets.
Gold Forecast: XAU/USD Price Technical Analysis – Down Channel
Technically, XAU/USD failed to stabilize under the descending pitchfork’s median line (ML) signaling that the sellers are exhausted. In the short term, gold is trapped within a down channel pattern. As long as it stays under the downtrend line, the pressure remains high, XAU/USD could drop anytime again.
The 1785.08 weekly pivot point stands as an upside obstacle. You can see that the price failed to stabilize above it in the early morning.
XAU/USD could move sideways before developing a strong move. Staying above the median line (ML) could signal that the downside movement is over. A temporary consolidation followed by a valid breakout through the downtrend line could activate a new leg higher.
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