Gold Price Prediction: Will XAU/USD Hold Support as Risk Sentiment Recovers?

Current Market Picture

Yellow metal traders are reassessing positions as XAU/USD settles near the $4,450 level during Thursday’s Asian morning hours. The recent pullback signals a shift in market dynamics—following weeks of strength, investors are now locking in gains while simultaneously reconsidering their safe-haven positioning.

What’s Driving the Gold Price Correction?

The momentum loss reflects two competing forces. First, the intensity of geopolitical premium appears to be fading as traders digest recent international developments. When crisis narratives lose their urgency, capital naturally rotates away from defensive assets like gold and into risk-on vehicles.

Second, and perhaps more important for the gold price prediction, profit-taking has become systematic. David Meger, director of metals trading at High Ridge Futures, notes that the pullback represents “general profit realization following that recent surge.” This is textbook behavior—aggressive rallies attract momentum traders who exit at resistance levels, creating the technical correction we’re witnessing.

The Real Test: US Labor Data Looms

Where this correction stabilizes depends heavily on upcoming economic releases. The December employment report on Friday represents the critical event for near-term XAU/USD direction. Market expectations point to 60,000 job additions, with the unemployment rate potentially tightening to 4.5%.

Here’s why this matters for gold price prediction: if actual data disappoints relative to these forecasts, it strengthens the bull case for Federal Reserve rate cuts. Lower interest rates directly support gold—they reduce the “opportunity cost” of holding a non-yielding asset. Conversely, stronger-than-expected employment would justify the Fed’s cautious stance, potentially pressuring XAU/USD further below current levels.

Key Takeaway

Traders monitoring gold price prediction should treat this dip as a consolidation phase rather than a reversal. The technical pullback near $4,450 could offer support, but the directional certainty won’t return until Friday’s employment data reshapes expectations around the interest rate path.