According to ixbroker, gold (XAU/USD) eased slightly on Wednesday after reaching a fresh all-time high near $4,526 earlier in the session. Thin holiday liquidity ahead of Christmas has prompted mild profit-taking at elevated levels, with XAU/USD currently trading around $4,470, up nearly 3% for the week.
Bullion’s rally in 2025 has been historic, surging over 70% year-to-date and putting gold on track for its strongest annual performance since 1979. The advance has been supported by robust safe-haven demand amid ongoing geopolitical risks, economic uncertainties, and strong institutional and investment flows.
Weakness in the US Dollar (USD) has also contributed to gold’s gains. President Donald Trump’s protectionist trade rhetoric, combined with a cumulative 75 basis points (bps) of Federal Reserve (Fed) rate cuts in 2025, has lowered the opportunity cost of holding non-yielding assets like gold. Markets are also pricing in two additional rate cuts next year, further underpinning demand for the metal.
Near-term consolidation expected
In the short term, gold may consolidate as profit-taking continues and fresh market catalysts remain scarce. Nonetheless, the broader uptrend remains intact, suggesting the rally is likely to extend into 2026.
Market movers: Fed outlook and geopolitics
Economic data released ahead of the holidays offered a mixed picture. Initial Jobless Claims fell to 214K from 224K, below the 223K forecast, while Continuing Claims rose to 1.923 million. The US Bureau of Economic Analysis reported third-quarter GDP growth of 4.3% annualized, beating both the prior 3.8% estimate and market expectations of 3.3%. Meanwhile, softer data elsewhere—including a 2.2% drop in Durable Goods Orders in October and a fall in Consumer Confidence to 89.1—kept the US Dollar under pressure.
The US Dollar Index (DXY) trades around 97.96, above its lowest point since October 3. Market expectations for the Fed’s January meeting remain for steady rates, with CME FedWatch showing just a 13% probability of a cut. Investors still anticipate easing later in 2026 amid signs of cooling inflation and a softer labour market. Geopolitical tensions—including the Russia-Ukraine conflict, instability in the Middle East, and rising US-Venezuela friction—continue to support safe-haven demand.
Technical analysis: Bearish RSI divergence raises correction risk
On the daily chart, XAU/USD is navigating uncharted territory, but mild pullback risks are emerging. The Relative Strength Index (RSI) is overbought and showing early signs of fatigue, with a bearish divergence forming. Key support levels include the previous all-time high near $4,381 and the 9-day Simple Moving Average (SMA) around $4,372. A decisive break below this zone could expose the 50-day SMA near $4,167, where buyers may step back in.
On the upside, immediate resistance sits at the $4,500 psychological level, ahead of a potential retest of the all-time high at $4,526. A sustained move above this zone could open the door toward the $4,600 handle. The Average Directional Index (ADX) remains above 30, indicating the underlying trend is still strong despite short-term momentum cooling.
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