- XAU/USD is experiencing a slight decline and is holding slightly above $2,018 with a minor decline.
- Key indicators like the RSI and MACD are showing muted buying momentum as bulls consolidate the December rally.
At Friday’s meeting XAU/USD was trading at $2,018, a slight decrease of 0.08% to close with a 0.55% weekly loss. After reaching the $2,135 level in December, buyers have largely taken a break, suggesting a neutral to bullish outlook on the daily diagram. Despite some dynamics observed in the four-hour chart, the indicators remain relatively weak.
Additionally, a USD recovery fueled by markets adjusting their bets on the Federal Reserve (Fed) due to the resilience of the US economy is pushing the metal lower. On Friday, soft US personal consumption (PCE) data from December did not provide a strong response to market expectations for the Fed to be met next week. So far, markets have pushed back the start of the easing cycle to May from March, but the Fed’s tone may change those expectations.
XAU/USD Levels to Watch
Technical indicators on the daily chart, namely the relative strength index (RSI) and the metal’s position regarding its 20, 100 and 200 simple moving averages (SMA) paint a mixed picture. Despite the RSI showing a negative slope and currently in negative territory, the price is managing to hold above the 20, 100 and 200 day SMAs. This is indicative of bullishness in the broader time frame and the recent decline can be explained by the bulls taking a breather after pushing the price to a high of $2,135 in December.
By scrolling down to the narrower four-hour chart, momentum indicators current weak but existing bullish undertones. The 4-hour RSI is showing a negative bias but is currently in positive territory, while the 4-hour Moving Average Convergence Divergence (MACD) continues to form flat red bars, again suggesting bearish momentum remains.
