Gold continues to decline as investors secure their profits

Gold Prices Retreat as Bullish Momentum Weakens

The price of gold (XAU/USD) continued to decline on Thursday, marking its second straight day of losses after failing to break through the significant $4,500 level. As of now, XAU/USD is trading around $4,425, reflecting a decrease of approximately 0.60%.

This recent downturn has prompted some investors to lock in profits, while a stable US Dollar (USD) is further weighing on gold, limiting its gains even as broader economic conditions remain generally favorable.

Geopolitical developments remain at the forefront of market attention. Traders are keeping a close eye on the ongoing situation between the United States and Venezuela, as well as new statements from US President Donald Trump regarding Greenland.

Despite these pressures, ongoing expectations for additional monetary easing by the Federal Reserve (Fed) could help limit further declines and maintain interest from buyers near crucial support areas.

Looking forward, market participants are awaiting the release of weekly US Jobless Claims data later today, followed by Friday’s Nonfarm Payrolls (NFP) report, both of which could influence short-term Fed policy expectations and impact gold’s next move.

Key Market Drivers: Geopolitical Uncertainty and US Economic Data

• Analysts highlight that precious metals could experience a short-term pullback due to the annual January rebalancing of the Bloomberg Commodity Index (BCOM), scheduled between January 8-9 and January 15.
• In a recent interview, President Donald Trump remarked that the duration of direct US involvement in Venezuela remains uncertain, suggesting it could last much longer than initially anticipated. He reaffirmed intentions to help rebuild Venezuela, including leveraging the country’s oil resources to lower global prices and generate revenue for both nations.
• White House Press Secretary Karoline Leavitt announced that Venezuelan oil shipments to the US are imminent, with proceeds from sales to be managed under US government oversight. US Energy Secretary Chris Wright emphasized that Washington intends to supervise Venezuelan oil sales for the foreseeable future, granting the US considerable influence over oil flows and revenues.
• Adding to the geopolitical landscape, US authorities recently seized a Russian-flagged oil tanker in the North Atlantic, allegedly connected to Venezuelan crude exports. Additionally, a bipartisan sanctions bill supported by President Trump could empower the administration to impose tariffs of up to 500% on countries continuing to purchase Russian oil.
• The White House has confirmed that President Trump is actively considering acquiring Greenland for its strategic importance, noting that military options remain on the table. This proposal has met with strong opposition from Denmark and NATO partners.
• Recent US economic data has been mixed. The ISM Services PMI for December rose to 54.4, surpassing expectations, while the ADP Employment Change report showed private sector job growth of 41,000 in December, which was below forecasts but an improvement over the previous month’s decline. Meanwhile, JOLTS figures revealed a drop in job openings to 7.146 million in November, falling short of the anticipated 7.6 million.

Technical View: Gold Bulls Lose Momentum Below $4,450

From a technical perspective, gold’s short-term outlook has shifted to a more bearish stance after failing to hold above the $4,500 threshold and slipping below $4,450, which now serves as immediate resistance.

Momentum indicators are confirming this weaker trend. The Relative Strength Index (RSI) on both hourly and daily timeframes is moving lower after nearing overbought levels, indicating that upward momentum is fading and buyers are becoming less active.

On the 4-hour chart, the 100-period Simple Moving Average (SMA) around $4,400 is acting as the first significant support for bulls. A decisive move below this area could intensify selling and bring the next support near $4,300 into focus, where buyers previously stepped in earlier in the week.