Gold is currently trading around $2,622, signaling a sideways trend before potentially moving lower. On the 4-hour chart, prices are confined within a narrow range, capped by a strong resistance zone at $2,635 - $2,640, where the EMA 89 ($2,635) acts as a key barrier. Conversely, crucial support at $2,610 - $2,615 serves as a pivotal level to limit downside risks.
While the market is in an accumulation phase, pressure from expectations that the Fed will maintain a less dovish policy stance has diminished gold’s appeal. Additionally, low year-end trading volumes have resulted in narrow price movements, with cautious sentiment prevailing.
In the short term, a break below $2,610 could extend the decline toward the $2,600 region or even lower. On the other hand, if XAU/USD manages to surpass the $2,635 level, the next upside target would be $2,650 - $2,660. However, this scenario remains constrained amid tightening Fed policy expectations and rising bond yields. Traders should closely monitor signals from U.S. economic data to determine the next drivers of gold prices.