Gold Price Forecast: XAU/USD accelerates its decline ahead of FOMC Meeting Minutes

XAU/USD Current price: 2,031.70

• Encouraging US data fueled demand for an already strong US Dollar.
• The FOMC Meeting Minutes could shed light on potential rate cuts.
• XAU/USD pressures daily lows with a strong bearish momentum, aims for $2,000.

XAU/USD extended its slide on Wednesday, trading near an intraday low of $2,031.20 mid US-afternoon. The US Dollar maintained its positive momentum for most of the day, reaching fresh weekly highs against most major rivals. XAU/USD trades at levels that were last seen on December 21, ahead of the release of the Federal Open Market Committee (FOMC) Meeting Minutes.

Good news in the United States (US) fueled the USD rally after Wall Street’s opening, as the ISM Manufacturing PMI improved by more than anticipated in December, hitting 47.4 after posting 46.7 in November. Additionally, the US Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of November stood at 8.8 million little changed from the previous monthly reading. A cooling labour market will help the Federal Reserve (Fed) to stay on the pivot path.

Fresh clues on what the central bank may be into will come mid-US afternoon with the FOMC Minutes. The document could clarify how deep the discussion on rate cuts has been when policymakers met in mid-December. It could also shed light on the potential date of the first rate cut, which the market currently prices in for May.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows the bright metal is sharply down for a fourth consecutive day, and currently battles with a flat 20 Simple Moving Average (SMA), with a clear break below it opening the door for additional slides. The longer moving averages maintain their modest bullish slopes far below the current level, providing little directional clues. Finally, technical indicators gain downward traction within positive levels, reflecting increased selling interest.

The bearish momentum remains strong in the near term, and according to the 4-hour chart. XAU/USD is breaking below a directionless 100 SMA, while the 20 SMA accelerated south far above the current level. At the same time, technical indicators maintain firm downward slopes after piercing their midlines, in line with a continued slide.

Support levels: 2,031.00 2,015.50 1,998.65

Resistance levels: 2,040.20 2,052.30 2,065.45