Gold is correcting from weekly highs of $4,500 early Wednesday as buyers take a breather after the recent relentless upsurge, backed by geopolitical flare-ups globally and increased US Federal Reserve (Fed) interest rate cut bets for 2026.

Gold sees profit-taking ahead of key US jobs data

Having climbed nearly 4% so far this week, traders resort to profit-taking on their Gold long positions in a readjustment move after the bright metal ran into the $4,500 barrier.

Traders also gear up for a bunch of high-impact US economic data releases due later on Wednesday, including the ADP monthly Employment Change, JOLTS Job Openings and ISM Services PMI data.

These data will be closely scrutinized to gauge the timing of the next Fed rate cut as markets continue pricing in two rate reductions for this year. Weaker-than-expected jobs and private services sector data could reaffirm bets for two cuts in the coming months, boding well for non-yielding assets like Gold at the expense of the US Dollar (USD).

On Monday, the US ISM Manufacturing PMI declined to 47.9 in December, against the forecast of 48.3, reinforcing dovish Fed expectations and keeping the recovery attempts in the USD short-lived.

The ongoing bearish undertone around the USD, combined with the escalating geopolitical tensions globally, continues to keep the positive momentum intact in Gold, despite the latest retracement.

On the latest geopolitical developments, Russia deployed submarine and other naval vessels to escort an aging oil tanker off the coast of Venezuela, according to the Wall Street Journal (WSJ).

Meanwhile, China ramped up tensions with Japan by banning exports of goods with potential military uses, following Taiwan-related remarks by Japan’s Prime Minister Sanae Takaichi.

Gold price technical analysis: Daily chart

In the daily chart, the 21-day Simple Moving Average (SMA) advances above the 50-day, with price holding over both, signaling firm bullish momentum. The 21-day SMA at $4,363.88 acts as nearby dynamic support. The Relative Strength Index (RSI) at 63.41 remains in bullish territory without overbought readings, keeping the bias tilted to the upside.

Broader trend metrics stay supportive as the 100- and 200-day SMAs continue to climb and the market trades above them. The moving average stack shows buyers in control, with secondary support at the 50-day SMA around $4,212.04 and deeper layers near the 100-day at $3,997.46 and the 200-day at $3,653.43. As long as price holds above the 21-day SMA, the uptrend would extend, while pullbacks could be absorbed into the rising averages.

(The technical analysis of this story was written with the help of an AI tool)

XAU/USD Current price: $4,478

• Economic growth continued in December, yet at a slower pace, according to S&P Global.
• The US ADP Employment Change report and JOLTS Job Openings will be out on Wednesday.
• XAU/USD aims to retest record highs in the $4,450 region.

Spot Gold extends its advance on Tuesday, hovering around $4,480 a troy ounce in the American afternoon. The XAU/USD pair advanced despite the better market mood, as reflected by the positive tone of global equities. Investors were cautiously optimistic after the release of tepid, yet encouraging growth-related data and ahead of the first batch of United States (US) employment data scheduled for Wednesday.

Throughout the day, S&P Global, alongside local banks, released the Services and Composite Purchasing Manager’s Indexes (PMIs) for major economies, which showed expansion continued in the Eurozone, the United Kingdom, and the US. Nevertheless, the preliminary estimates of the December Composite PMIs were slightly lower than the final November readings.

The EU index eased to 51.5 from 52.8 in November, while in the US, the Composite PMI fell to 52.7 from 54.2 in the previous month. Slower growth rates may not be an immediate concern given continued expansion, yet if the picture persists, it could prompt some fresh concerns among policymakers, and hence, affect monetary policies.

The US calendar will include the December ADP report on Employment Change and November JOLTS Job Openings on Wednesday. Given that the Federal Reserve (Fed) made clear that employment is its major concern, the data will likely shake the USD ahead of the Nonfarm Payrolls (NFP) report on Friday.

In the meantime, Australia will release the November Consumer Price Index (CPI) in the upcoming Asian session. Afterwards, German Retail Sales and the preliminary estimate of the EU HICP will precede US employment reports.

XAU/USD short-term technical outlook

From a technical point of view, XAU/USD is bullish. The 4-hour chart shows the pair holds on to modest intraday gains while advancing above all its moving averages. The 20-period 20 Simple Moving Average (SMA) at $4,404 provides relevant support while rallying beyond the longer ones, in line with the dominant trend. At the same time, the Momentum holds above its midline and advances, reflecting strengthening buying interest. Finally, the Relative Strength Index (RSI) indicator stands at 64.10, keeping room for further upside before the risk of a pause emerges. Should pullbacks occur, the 100 SMA at $4,385.02 would cushion declines, while sustained strength could keep the bias pointed higher toward fresh highs.

In the daily chart, XAU/USD keeps finding buyers on pullbacks to the 20-day SMA, which advances above the 100- and 200-day SMAs, with all three rising as price holds above them, reinforcing a bullish structure. The 20-day SMA stands at $4,357.69, offering immediate dynamic support. Meanwhile, the Momentum indicator advances above its midline, while the RSI also aims north at around 65, hinting at higher highs ahead.

(The technical analysis of this story was written with the help of an AI tool)