XAU/USD Under Pressure as Dollar Strengthens

Gold prices are currently facing headwinds, trading below $2,600 per ounce. This decline coincides with a strengthening US dollar, driven by a confluence of factors. The US equity market has experienced a downturn, with all three major indices trading lower, dampening risk appetite and bolstering demand for the safe-haven US Dollar. This risk-off sentiment is further amplified by a rise in US Treasury yields, particularly the 10-year yield, which increases the opportunity cost of holding non-yielding assets like gold.

Adding to the pressure on gold prices is a string of disappointing US economic data. Durable Goods Orders for November came in below expectations, while Consumer Confidence declined sharply. This data may increase concerns about the health of the US economy and further strengthen the dollar.

From a technical perspective, the short-term outlook for gold appears bearish. On the daily chart, the price is struggling to hold above its 100-day Simple Moving Average (SMA), a key technical level, and has shown signs of weakening momentum. On the 4-hour chart, the price has broken below both the 100 and 200 SMAs, and technical indicators are pointing downwards.

Looking ahead, gold prices may continue to face downward pressure in the coming sessions if the US Dollar remains strong and the market mood remains subdued. However, it is important to note that gold prices can be volatile and influenced by a variety of factors, including geopolitical events and changes in investor sentiment.