Gold Weekly Forecast: $3,042 Faces Pressure from Strong Dollar, Data-Heavy Week
Gold (XAU/USD) ended last week slightly lower at $3,042, losing 0.19% as the US dollar strengthened on the back of the Federal Reserve’s cautious tone.
While the Fed left interest rates unchanged at 4.25%–4.50%, it maintained its stance on inflation vigilance, even as it hinted at two rate cuts in 2025. This, coupled with stronger-than-expected US data and muted safe-haven demand despite Middle East tensions, weighed on bullion.
Looking ahead, gold faces a pivotal week. The US economic calendar is packed with high-impact releases, including the Flash PMIs (Monday), CB Consumer Confidence and New Home Sales (Tuesday), Durable Goods Orders (Wednesday), Q4 GDP revision (Thursday), and the Fed’s preferred inflation measure — the Core PCE Price Index — on Friday.
Dollar Strength vs. Gold Support
The US Dollar Index (DXY) rose to 103.80 last week, creating headwinds for gold. If upcoming data reinforces the Fed’s cautious optimism on inflation, the dollar could extend gains — putting downward pressure on XAU/USD.
However, gold remains supported by underlying macro risks and any unexpected softness in GDP or inflation data could reignite bullish momentum. Traders will be particularly focused on Friday’s Core PCE data, as a weaker-than-expected reading could increase rate-cut bets and lift gold.
Key Levels and Technical Setup
Technically, gold remains in a consolidation phase. It’s trading above key support at $3,000 but struggles to gain traction above $3,070. A break below $3,000 would expose $2,975 and $2,940, while sustained strength above $3,080 could bring $3,125 and $3,150 back into focus.
Levels to Watch:
Resistance: $3,070, $3,125, $3,150
Support: $3,000, $2,975, $2,940
Momentum indicators remain neutral on the daily chart, awaiting a clear catalyst from macro data or Fed commentary.
Geopolitics and Market Sentiment
Although escalating tensions in Gaza have historically boosted gold’s appeal, the current market appears more dollar-driven. Investors are discounting geopolitical risks for now, focusing instead on interest rate expectations and economic fundamentals.
The bond market’s reaction — with 10-year yields steady at 4.18% and real yields at 1.90% — reflects a cautious but not alarmist outlook. Traders are waiting for a directional cue, which could come from this week’s inflation data and consumer sentiment reports.
Gold Outlook: Bearish Bias Near-Term, Cautious Recovery If Data Disappoints
Unless the Fed’s tone softens or data surprises to the downside, gold could remain range-bound with a bearish tilt. Short-term rallies may face resistance near $3,080–$3,125, while a decisive break below $3,000 could trigger deeper losses. However, volatility could increase later in the week, especially around Thursday’s GDP release and Friday’s Core PCE inflation data.
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