Gold Price Forecast: Bullion Remains Below Pre-US Election Prices

Gold Price Forecast: Bullion Remains Below Pre-US Election Prices

Gold prices have pulled back from a fresh weekly high of $2,726, breaking the recent trend of higher highs and lows. The precious metal is trading below pre-U.S. election levels, reversing the gains seen earlier in the week. As a result, bullion may consolidate within the November range, particularly as the 50-Day Simple Moving Average (SMA) flattens near the $2,671 level.

The Federal Reserve's upcoming interest rate decision is likely to impact the price of gold. The central bank is expected to deliver a 25 basis point (bp) rate cut despite the U.S. Consumer Price Index (CPI) showing a slight increase to 2.7% year-over-year in November. Signs of dissent within the Federal Open Market Committee (FOMC) could provide a boost to gold prices, especially if the Fed continues to unwind its restrictive policy.

However, gold may no longer reflect the bullish trend observed earlier this year, with its movement now constrained by the flattening slope of the 50-Day SMA.

Gold Price Outlook

Looking at the technical outlook, gold's failure to break above the $2,730 level (the 100% Fibonacci extension) signals a potential reversal. A decline below the $2,630 (78.6% Fibonacci extension) to $2,660 (23.6% Fibonacci extension) region could open the door for a test of the monthly low at $2,614. A break below $2,590 (100% Fibonacci extension) could lead to further downside, with $2,550 (61.8% Fibonacci extension) becoming a key target.

On the other hand, a close above $2,730 would set the stage for a retest of the November high at $2,762. A break above $2,790 (50% Fibonacci extension) would pave the way for a potential rally towards $2,850 (61.8% Fibonacci extension).

In summary, gold's price movement remains uncertain as traders await the Federal Reserve's decision, with the metal consolidating in anticipation of future policy shifts.