Technical Analysis Points Up for Gold, After XAU Bounces 2% Today

Last week we predicted that the retrace in Gold might come at the 100 daily SMA and after today’s 2% bounce, it is looking increasingly likely that the decline is over and the uptrend might be resuming.

The Gold price is oversold in different timeframe charts, and indicators provided support during the considerable pullback in the first half of November. The week began quietly regarding the calendar, with limited economic data or significant headlines to influence investor sentiment. Attention remains on whether the post-election momentum will continue. The U.S. dollar remained mostly steady, dipping slightly during the U.S. session, though the move was minor compared to recent gains.

Safe havens showed resilience, with USD/JPY being the standout mover in the European session, climbing from 154.50 to just above 155.00 as the yen weakened. GOLD and silver also advanced, while the Swiss franc strengthened against the dollar.

Gold Daily Chart – The 100 SMA Held As Support

Gold rebounded above $2,600 after failing to close below the 100-day SMA at $2,550 last week. Having fallen over $250 from its late October high of $2,790 to a two-month low last Thursday, gold showed signs of recovery. A doji candlestick on Friday hinted at a potential bullish reversal, followed by strong momentum today.

Gold Chart Weekly – The 20 SMA Held the Decline Here

Silver mirrored gold’s upward trajectory, with U.S. gold futures trading near $2,615, up approximately 2%. The broader bullish trend for gold remains intact, as the weekly chart highlights the 20 SMA holding as support despite recent pullbacks. This corrective bearish move, falling around 10% from October highs, appears contained now, with buyers stepping in to prevent further losses.

Challenges for Gold Buyers and Outlook

Despite the rally, gold faces short-term resistance at moving averages above current levels, suggesting buyers will need to maintain momentum. Early signs of a bottom are emerging, but challenges remain, particularly from expectations of tighter U.S. monetary policy under President Trump in 2025.

Fed Chair Jerome Powell’s recent comments reinforced this outlook, emphasizing caution in reducing rates due to persistent inflation, a strong labor market, and robust economic growth. This stance supported the dollar, putting pressure on gold prices.

Conclusion

Gold’s rebound is encouraging for buyers, but its sustainability depends on how it navigates upcoming resistance and the resurgence of USD strength. While today’s gains are a positive sign, the interplay between inflation expectations, interest rate policy, and market sentiment will ultimately dictate the next phase for gold and other safe-haven assets.

Gold Live Chart