• The gold forecast remains tilted to the downside, aiming to test $4,400 as the dollar recovers ahead of the US NFP.
• The upbeat US ISM Services PMI weighed on gold, igniting a sell-off.
• The gold’s downside is limited by the easing Fed and China’s continued buying of physical gold.

Gold price remains softer, trading under $4,450 in Thursday’s European session. The precious metal has lost around 1% from its weekly peak of $4,500. The pullback after Monday’s solid rally reflects a stronger dollar ahead of US NFP data and some profit-taking.

The immediate pressure came on gold from Wednesday’s US data, which helped offset bearish pressure on the US dollar. JOLTS job openings for November fell to 7.146 million, revealing a gradual cooling of labor markets. Meanwhile, the ADP employment surged by 41k in December, a big leap from November’s contraction but still below the forecast. Contrarily, the ISM Services PMI soared to 54.5, the strongest reading since late 2024. The combination has strengthened the US dollar without triggering a decisive shift in sentiment.

The precious metal’s downside remains comparatively contained despite the near-term dip as markets anticipate around two Fed rate cuts this year. The easing outlook limits the dollar’s holding appeal and favors non-yielding gold. Meanwhile, China’s central bank continues gold buying for the 14^th consecutive month in December, lending strong support to the gold.

On the geopolitical front, Trump’s recent remarks about Greenland, capturing the Venezuelan President, and recent tension between China and Japan after China’s sanctions on Japan’s certain exports, have kept the risk sentiment deteriorated. Meanwhile, equities remain softer too. These factors keep gold demand underpinned as a safe-haven asset.

Looking ahead, the next decisive move for gold is linked with Friday’s Nonfarm Payrolls report. A weaker reading could revive expectations of aggressive Fed easing and weigh on the Dollar, opening the door for another push higher in gold. Until then, consolidation below $4,500 looks more like a pause than a reversal.
 

Gold Technical Forecast: Bears to Test 200-MA
 

(Click on image to enlarge)

Gold 4-hour chart
 

The gold price remains wobbling in a brief range between 20- and 50-period MAs, while the RSI remains flat near 50.0. A 100-period MA coincided with $4,400 level, which remains a decisive level for the traders. If broken, the selling traction could ignite further to test the $4,280 demand zone aligned with the 200-period MA.

On the upside, moving above the 20-period MA at $4,455 could alleviate the bearish pressure and lead to a test of the $4,500 level ahead of all-time highs near $4,550. However, the current price action shows no clear path of least resistance.

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