Gold Price Forecast: XAU/USD Edges Higher Near $4,050 Amid US Economy Concerns

Gold prices edged up to around $4,020 early Monday, reflecting investor caution amid signs of economic slowdown in the US. The latest Challenger report showed over 150,000 job cuts in October, the largest for that month in two decades, indicating a cooling labor market. This has increased expectations of a 25-basis-point rate cut by the Federal Reserve in December, presently priced at a 66% likelihood according to CME FedWatch.

The University of Michigan’s Consumer Sentiment Index dropped to 50.3 in November, hitting its lowest since mid-2022, further adding to concerns over US growth prospects. Meanwhile, reports suggest the longest US government shutdown may soon end, which could temper gold’s haven demand.

Lower interest rates reduce the opportunity cost of holding gold, supporting the non-yielding metal’s price. However, any resolution to political and fiscal uncertainty could exert downward pressure. Technical analysis sees gold poised to test key resistance near $4,050, with potential for further upward momentum if global risks persist.

Key Highlights

Gold climbs near $4,050 amid weak US private job cuts and low consumer sentiment.​

Fed rate cut expectations rise after October job cuts, increasing safe-haven demand for gold.​

US Consumer Sentiment Index hits a near 3.5-year low, stoking economic concerns.​

Potential end of US government shutdown could mitigate gold’s safe-haven appeal.​

Technical levels suggest gold may test resistance near $4,050 with upward potential amid uncertainty.​

Sources: FXStreet, Bloomberg, Forex Crunch, RoboForex, University of Michigan, CME FedWatch