Gold Price Forecast - XAU/USD Slides to $4,082 as Fed Uncertainty and Dollar Surge

Gold (XAU/USD) Slides to $4,082 as Fed Caution and Strong Dollar Pressure Global Markets

Gold (XAU/USD) declined to $4,082 per ounce, down 0.77%, erasing its two-day rebound as traders scaled back expectations for a December rate cut. Minutes from the Federal Reserve’s October meeting showed a divided committee, reducing the probability of a cut from 50% to 34%. The U.S. dollar index (DXY) climbed toward 100.26, its highest in two weeks, while 10-year Treasury yields held near 4.14%, suppressing demand for non-yielding gold. The delayed U.S. jobs report added further caution as markets positioned for slower easing and stronger real yields.

Fed Divide and Delayed Data Weigh on Gold Sentiment

The FOMC remains split between policymakers worried about overtightening and those favoring patience to confirm inflation control. With no fresh jobs data before the December 10 Fed meeting, traders have limited visibility, forcing a cautious stance. The prior report showed 119,000 jobs added and unemployment rising to 4.4%, suggesting cooling growth but not enough to trigger emergency easing. The delay in October data until December 16 amplifies uncertainty, leaving gold vulnerable to yield-driven corrections.

Technical Outlook for XAU/USD: $4,060 Pivot and $3,946 Key Structural Support

Gold’s chart signals a controlled pullback from October’s record $4,380 high. Price has slipped below the 0.382 Fibonacci level ($4,074), consolidating between $4,040–$4,080. The 20-day EMA ($4,059) acts as immediate support, while the 50-day EMA ($3,946) defines the broader structural base. A decisive break below $4,040 exposes downside toward $3,946, but recovery above $4,100–$4,133 could shift momentum back toward $4,190 and $4,275. The RSI (46) confirms fading momentum, and the Parabolic SAR flipped bearish earlier in November. Despite this, the 100-day EMA ($3,753) and 200-day EMA ($3,470) remain intact, sustaining the long-term uptrend.

UBS Raises 2026 Gold Forecast and Reinforces Long-Term Bullish Case

UBS upgraded its mid-2026 forecast to $4,500 per ounce, up from $4,200, citing steady central-bank accumulation, fiscal strain in the U.S., and persistently high geopolitical risk. The bank projects 750 metric tons of ETF inflows in 2026, more than twice the post-2010 average, and 900 metric tons of central-bank buying, slightly below 2025 but historically elevated. Strategists led by Wayne Gordon expect consolidation around $4,300 post-U.S. elections before new record highs into 2027. The firm’s upside scenario targets $4,900, assuming renewed fiscal stress and intensified geopolitical instability.

Asian Jewelry Demand Weakens as High Prices Hit Retailers

While institutional demand remains robust, retail markets in Asia are under pressure. Hong Kong jeweler Tse Sui Luen (TSL) reported a 15% revenue drop to HKD 731.9 million ($94 million) for the half-year ending September 30. Mainland China sales plunged 25% to HKD 412.4 million ($53 million), hurt by record-high gold prices curbing 24-karat jewelry purchases. Hong Kong sales rose 3% to HKD 244.2 million ($31.4 million), but management cited “geopolitical tension and weak luxury recovery” as key drags. Despite a 19% narrower net loss (HKD 35.3 million / $4.5 million), TSL breached loan covenants and began restructuring, highlighting retail stress beneath the institutional-led rally.

ETF and Futures Flows Turn Defensive as Momentum Fades

Gold-backed ETFs saw $1.1 billion in outflows over two weeks, reversing October’s inflows. COMEX December futures (GC=F) dropped 0.78% to $4,051.10, with open interest slipping 2.5%, reflecting profit-taking and defensive positioning. The global gold reserve value now stands at €4.22 trillion, up 44.6% from €2.51 trillion in late 2024, underlining the strength of institutional holdings despite near-term rotation. Year to date, gold remains up 50%, driven by earlier Fed cuts and persistent central-bank accumulation, though the recent correction reflects short-term repricing, not structural reversal

Macro Rotation: Equities and Dollar Strength Cap Bullion’s Upside

Gold’s weakness coincided with renewed equity appetite after Nvidia (NASDAQ:NVDA) reported $57 billion in Q3 revenue, sparking a 0.9% Nasdaq and 0.6% S&P 500 rise. As yields stabilize, investors rotated from defensive assets into growth equities, leaving gold exposed to relative outflows. The Dollar Index near 100.26 amplified the move, while silver (SI=F) fell toward $51, platinum (PL=F) hovered at $1,548, and palladium (PA=F) steadied near $1,410. Gold’s inverse correlation with real yields remains consistent; a sustained yield above 4% limits its upside until monetary conditions loosen.

Short-Term Setup: Support Holds but Breakout Requires $4,133

Intraday, XAU/USD rebounded modestly to $4,090 (+0.31%), finding buyers near $4,060. The 50-day EMA ($3,972.97) remains the critical line of defense, while resistance at $4,133.95 and $4,192.36 defines the near-term breakout zone. A close above $4,133 could reestablish bullish control; failure would invite another retest of $3,946. For now, market tone is neutral-to-bullish, awaiting confirmation from U.S. employment data and Fed guidance.

Verdict: XAU/USD — BUY / STRUCTURALLY BULLISH LONG-TERM

Gold’s decline represents consolidation, not exhaustion. The metal’s ability to remain above $4,000 under a stronger dollar demonstrates resilience. Institutional flows, sovereign demand, and UBS’s raised forecasts support a bullish structural outlook. Short-term caution persists due to policy uncertainty, but the $4,060–$4,080 range remains an attractive accumulation area for long-horizon investors. Rating: BUY (Long-Term Bullish) — Support: $3,946 | Resistance: $4,133 | Target: $4,500 (UBS mid-2026 projection).

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