XAU/USD Current price: $2,639.49
- US markets are closed for the Thanksgiving holiday.
- Market participants continue to expect the US Federal Reserve to cut interest rates in December.
- XAU/USD is likely to gain downward momentum in the near term and could soon break above $2,600.
Spot gold remained limp below the $2,650 level on a quiet Thursday as investors geared up for an extended weekend. A set of United States (US) macroeconomic indicators released on Wednesday predicted continued calm as all US markets are closed for the Thanksgiving holiday.
On the bright side, positive metals are supported by rising expectations that the Federal Reserve will cut rates by another 25 basis points (bps) at its mid-December meeting. According to CME FedWatch Toll, the probability is currently around 70%.
Meanwhile, European stock markets closed higher, led by the tech sector, as concerns about the US imposing new tariffs on Chinese goods abated.
XAU/USD short-term technical outlook
From a technical perspective, XAU/USD has made little progress. It has barely risen for the third day in a row, but remains at the lower end of its weekly range after falling sharply on Monday. Technical readings on the daily chart show that risks are skewed to the downside as gold meets sellers near the bearish 20 simple moving average (SMA) for the second day in a row. Meanwhile, the 100 and 200 SMAs are still well below current levels and have partially lost their upside potential. Finally, technical indicators are not heading anywhere near negative levels, consistent with a lack of buying interest.
In the short term, XAU/USD is neutral to bearish on the 4-hour chart. The pair is trading just above the converging 20 and 100 SMAs, with the short end showing a stronger downslope, suggesting increasing selling pressure. The 200 SMA, on the other hand, is directionless well above the short one. Technical indicators suggest that both may rotate south around the midline and the bright metal could fall further, reflecting increased selling pressure.
Support level: 2,626.70 2,611.35 2,598.70
Resistance level: 2,643.30 2,655.00 2,671.55
