Gold Price Forecast: Gold could extend its corrective slide

Disappointing U.S. economic data sparked speculation that the Federal Reserve may start reducing interest rates in 2025. On the other hand, the European Central Bank (ECB) followed expectations by lowering its key rates by 25 basis points. Gold prices (XAU/USD) took a bearish turn after falling below the $2,700 mark. On Thursday, spot gold faced downward pressure, trading at around $2,680 per ounce. The U.S. Dollar (USD) gained strength during the U.S. session, driven by disappointing U.S. economic reports. For the week ending December 6, Initial Jobless Claims rose to 242K, which was worse than the expected 220K and higher than the previous week's 225K. Additionally, the November Producer Price Index (PPI) came in at 3.4%, surpassing the anticipated 3.2% and previous 3.1%, reinforcing the idea that the Federal Reserve might cut rates in the coming years. Despite starting the day with some cautious optimism, the U.S. stock market eventually closed lower, with all three major indexes in negative territory, reflecting weak market sentiment. Interestingly, the U.S. Dollar received more attention than gold as a safe-haven asset. Looking ahead, Friday appears to be a quiet day for markets, as there are no major events scheduled. However, next week will bring interest rate decisions from the Bank of Japan (BoJ), the Federal Reserve (Fed), and the Bank of England (BoE). Although most of the rate moves are anticipated, the focus will be on potential shifts in monetary policy in 2025. XAU/USD Short-Term Technical Outlook: On the technical front, the XAU/USD pair could continue its downward movement in the near term, although it is not entirely bearish. The daily chart shows the price holding above all major moving averages, with the 20-Simple Moving Average (SMA) trending upward, and both the 100 and 200 SMAs showing a bullish bias. However, momentum indicators suggest a bearish shift, as the Momentum indicator has dropped below its 100 mark, and the Relative Strength Index (RSI) also points lower, although still hovering around 54. From a 4-hour chart perspective, XAU/USD is trading beneath the 20 SMA, which remains above longer-term moving averages that are showing a neutral trend. The price could continue its correction, as momentum indicators signal a downside bias, but the Momentum indicator is still above its 100 level, suggesting that any decline may not be overly sharp. Support levels: 2,676.30, 2,662.50, 2,650.40 Resistance levels: 2,693.70, 2,704.35, 2,722.60