USD Strength and Liquidation Push Gold Lower; Precious Metals Forecast Hinges on CPI Data

Market Overview: Yellow Metal Under Pressure

Gold (XAU/USD) has slipped below the $4,350 level during Thursday’s Asian trading as investors lock in gains following recent advances. The retreat follows strength in the US Dollar, which has rebounded from earlier weakness. Market participants remain watchful ahead of crucial US inflation readings that could reshape the precious metals forecast for coming sessions.

Technical Landscape: Constructive Pattern Persists Despite Near-Term Pullback

Despite the day’s downward pressure, gold maintains a favorable technical setup on the four-hour timeframe. The yellow metal continues to trade above its 100-day Exponential Moving Average, a key support level that underscores underlying buying interest. With Bollinger Bands expanding and the 14-day RSI hovering above midline levels, the technical structure suggests upside potential remains intact.

Bullish scenarios could emerge if price action breaks above $4,352, potentially testing the all-time peak near $4,381 and eventually the $4,400 psychological threshold. Conversely, downside scenarios would activate if the precious metal closes below the December 17 floor of $4,300, with the December 16 low at $4,271 and the 100-day EMA support at $4,233 representing deeper downside targets.

Macro Drivers: Rate Cuts and Safe-Haven Demand

Recent employment data has reinforced expectations for further monetary easing from the Federal Reserve. With the labor market cooling—nonfarm payrolls added just 64,000 positions in November compared to an October decline of 105,000—markets have repriced the probability of a December rate cut to approximately 31%, up from 22% prior to the jobs report.

Fed Governor Christopher Waller has signaled openness to additional cuts to normalize rates, though he cautioned against hasty action given lingering inflation. Atlanta Fed President Raphael Bostic struck a more hawkish tone, indicating skepticism about rate reductions next year unless inflation moderates significantly.

Lower borrowing costs would reduce the opportunity cost of holding non-yielding assets like gold, providing support for the precious metals forecast outlook.

Geopolitical Risks Buoy Safe-Haven Appeal

Escalating tensions between the US and Venezuela have introduced another layer of complexity to energy markets and risk sentiment. Venezuelan authorities have deployed naval vessels to protect oil shipments amid American blockade threats, heightening geopolitical uncertainty. Such developments typically elevate demand for traditional safe-haven instruments, including precious metals, as investors seek portfolio protection.

Inflation Data as the Session’s Focal Point

The US Consumer Price Index release scheduled for Thursday afternoon represents the session’s most significant catalyst. Headline CPI is anticipated to rise 3.1% year-over-year for November, while core inflation is expected to climb 3.0% annually. Additionally, weekly Initial Jobless Claims figures will provide fresh labor market insights.

These releases will be instrumental in shaping the precious metals forecast, as inflation outcomes could either validate or challenge current rate-cut expectations, directly influencing gold’s near-term trajectory and safe-haven positioning.