09.12.202500:16 Forex Analysis & Reviews: XAU/USD: In a Range and Near 4200.00

XAU/USD started the week in a consolidation phase, holding above the 4200.00 level but not showing a clear upward momentum. Investors are refraining from taking action ahead of Wednesday, when the Federal Reserve will announce its key interest rate decision.

In the first half of Monday's U.S. trading session, XAU/USD was trading near 4200.00, remaining within a narrow range of 4218.00–4190.00, while markets await the Fed's interest rate decision.

The dollar's stabilization and the rise in Treasury yields are curtailing XAU/USD's growth potential.

Main Factors Pressuring the Gold Market

• Strengthening of the U.S. Dollar Index (USDX)
• Rise in Treasury yields
• Caution among market participants before the Fed's meeting results are announced.

However, among the negative factors, there are several elements creating additional demand for the precious metal as a safe-haven asset:

• General market sentiment toward gold remains cautiously optimistic, also due to historically low central bank rates.
• Ongoing geopolitical tensions continue to support safe-haven assets, including gold.
• Flows into ETFs. According to WGC, global gold ETFs recorded a sixth consecutive month of inflows in November, adding about $5.2 billion, and assets under management reached a record $530 billion — a factor supporting demand.

Technical Picture

XAU/USD remains in a sideways range. The main support is in the 4200.00–4190.00 zone (200 EMA on the 1-hour chart), where there is consistent buying interest. The 4264.00 level (recent local highs) continues to hinder growth. Its confident breakout will pave the way for a retest of historical highs.

Technical indicators (in our case, RSI and OsMA) on the weekly chart recommend buying, while on the daily chart, they have shifted to the sellers' side, signaling a potential correction. A breakout below 4190.00 will confirm the indicators' readings, with the target being the support zone at 4100.00 (200 EMA on the 4-hour chart) – 4035.00 (50 EMA on the daily chart).

Conclusion

Gold remains sensitive to the dynamics of the dollar, yields, and geopolitics. The momentum is weak, dominated by consolidation. Despite some stabilization of the USD and the growing attractiveness of debt instruments, investors remain attentive to the gold market, seeing opportunities to hedge financial risks.

However, any unexpected rhetoric from the Fed, strong macro data, or sharp changes in the geopolitical situation could quickly shift the balance of supply and demand.

In the upcoming sessions, the dynamics of XAU/USD are likely to remain sideways until markets receive a clear signal from the Fed. Buying on dips in the 4200.00–4180.00 area seems preferable for buyers in a consolidation phase, while a steady breakout above 4264.00 will be a key trigger for resuming bullish momentum.

The market behavior of gold shows that the metal's strong protective properties are preserved even in a moderately aggressive macroeconomic environment. As the Federal Reserve's decision-making moment approaches, market participants are advised to monitor liquidity indicators and trade cautiously, focusing on technical support levels of 4200.00–4180.00.