Here’s the update on XAUUSD today, December 4, 2023. Gold prices (XAU/USD) have experienced a strong rally over the past three weeks, reaching an all-time high around $2,144-2,145 on Monday. However, it has since declined and is currently trading below $2,080, up 0.30% today.

The US Dollar (USD) has gained support following the rise in US Treasury yields, prompting profit-taking in gold. Although geopolitical tensions in the Middle East are short-lived, stable stock markets and a $70 drop in gold prices indicate their impact.

The acknowledgment that the Federal Reserve (Fed) will halt its tightening measures and may lower interest rates in March 2024 could limit the rise in US yields, restraining USD strength and supporting gold prices.

Fears of a COVID-like outbreak in China and grim global prospects are making gold a safe haven. Traders are likely to remain cautious ahead of important US economic data, including the NFP report on Friday.

Market News Summary: Price correction in gold after record highs, limited downside potential.

  1. Global risk rally halted after Houthi rebels attacked in the Red Sea.
  2. US defensive strikes killed five Iraqi militants, escalating tensions.
  3. Rising USD and geopolitical tensions prompted profit-taking in gold.
  4. Confidence that the Fed will maintain policy until December and cut rates in March 2024 provides support.
  5. Fed's Jerome Powell rejected speculation of aggressive rate cuts on Friday.
  6. Investors believe Fed policy shifts will limit recovery in US yields and the dollar.
  7. US economic calendar: ISM Services PMI, ADP employment report, and NFP report on Friday.
  8. World Gold Council survey: 24% of central banks plan to increase gold reserves, reflecting pessimism toward the US dollar as a reserve asset.

Technical Analysis: Potential gold buying near Fibonacci levels.

From a technical perspective, the intraday pullback has pushed gold prices below the 23.6% Fibonacci retracement level, approximately in the $1,932-$1,931 range from the November rally. The Relative Strength Index (RSI) on the daily chart shows an extremely overbought condition, limiting buyers' interest in opening new positions in gold.

Furthermore, further declines could take XAU/USD to the 38.2% Fibonacci level around $2,063-$2,062, with potential support in the $1,952-$1,950 range. On the upside, resistance at $2,095-$2,100 may be encountered, with additional challenges at $2,118. Additional buying could push gold to test the record high of $2,144-$2,145, reinforcing short-term positive prospects and opening doors for further increases.


Warning!

This analysis regarding "XAUUSD Today: December 4, 2023 - Peak of Gold Increase" is based on fundamental and technical perspectives from reliable sources and does not constitute advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to serve as a reference in your trading.

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