Gold against the dollar declines from $4500 amid a profit-taking wave

Gold (XAU/USD) is experiencing downward pressure near the 4500-dollar level after strong gains during Asian market sessions. Precious metals are finding it difficult to secure profits despite the presence of strong supporting factors in the market, as traders choose to capitalize on the rises ahead of the upcoming critical US economic data.

The supporting factors for gold against the dollar remain strong

Geopolitical risks continue to attract traders’ attention, with recent developments indicating ongoing regional instability. The recent US military operations, along with tensions surrounding Greenland, Colombia, and Mexico, provide a fertile ground for sustained safe-haven support. Moreover, unresolved issues in Ukraine, Iran, and the Middle East boost demand for precious metals as a risk hedge.

On the monetary side, the Federal Reserve maintains a dovish stance as expected. The FedWatch tool shows that traders are pricing in potential interest rate cuts in March and an additional cut before the end of the year. This trend puts pressure on the US dollar and supports gold, which does not generate yields.

Federal Reserve bets support the outlook

Statements from Federal Reserve officials confirm that future adjustments to interest rates will remain data-dependent. Important upcoming data include the non-farm payroll report on Friday, next week’s consumer inflation figures, and Wednesday’s indicators from the services and employment sectors.

These releases will play a pivotal role in shaping monetary policy outlooks and the US dollar, and consequently, the movement of gold against the dollar in the coming period.

Technical analysis indicates short-term volatility

From a technical perspective, the 100-hour simple moving average (SMA) is below current prices and acts as a support zone around 4400 dollars. The Moving Average Convergence Divergence (MACD) has slipped below the signal line, and the histogram is expanding downward, reflecting near-term negative momentum.

The Relative Strength Index (RSI) is at 48.58 in a neutral zone, indicating that momentum is balanced after recent weakness. The nearby congestion range around 4450-4445 dollars may provide tactical support for the price.

Expected movement and scenarios

To regain bullish balance, the price needs to stabilize momentum and for the MACD to turn toward a bullish crossover, pushing the RSI above 50. If the price fails to achieve this, it may slip below the 100-hour simple moving average, opening the door for further downside pressure.

Traders are awaiting critical US economic data to determine their stance in the upcoming period, as these key releases will provide clear signals regarding the Federal Reserve’s policy path, the US dollar, and gold against the dollar.