The gold price trend slows down at $4,455 due to the strength of the Dollar and rising yields

The precious metal experiences a pause in its upward movement as the US Dollar gains ground and Treasury bond yields deepen their rise. After touching a low of $4.407 during the session, the XAU/USD trades virtually unchanged around $4,455, marking a critical equilibrium point ahead of December employment data.

Dollar on the Rise Supported by Improved Labor Data

The strengthening of the US Dollar responds to more resilient-than-expected labor indicators. Initial Unemployment Claims for the week ending January 3rd stood at 208K, below the estimate of 210K, though slightly higher than the 200K from the previous week. This data reinforces the narrative of stability in the labor market.

The labor outlook shows additional positive signs: the Challenger Job Cuts report revealed that companies announced just 35,553 layoffs in December, nearly half of the 71,321 recorded in November. According to Andy Challenger, Challenger, Gray & Christmas’s Chief Revenue Officer, “the year closed with the lowest layoff plans of the year. This scenario, combined with higher hiring plans, is a positive sign after a year of elevated layoffs.”

The reduction in the trade deficit also supports the recovery of the Dollar. The US Goods and Services Trade Balance improved in October, with the deficit falling to $29.4 billion from $48.1 billion in the previous period, significantly surpassing estimates that expected a deterioration to -$58.9 billion. The decline was mainly due to a substantial contraction in imports, especially pharmaceuticals.

The US Dollar Index (DXY) advances 0.20%, reaching 98.92, after breaking through a key technical resistance located at the 200-day simple moving average of 98.87. However, maintaining this level is crucial to consolidating the recovery.

Rising Yields Limit Bullish Pressure on Precious Metals

US Treasury yields continue their upward trajectory, exerting pressure on gold prices. The 10-year bond yield rose nearly 2.5 basis points, reaching 4.173%, while real yields increased 2 basis points to 1.903%. This inverse dynamic between yields and gold prices limits the metal’s upside potential.

Meanwhile, the Federal Reserve Bank of New York’s Consumer Expectations Survey reveals a deterioration in labor market outlooks. Expectations of finding a job decreased, while perceptions of losing a job worsened. Short-term inflation expectations increased to 3.4% in December from 3.2%, remaining unchanged in the medium and long term at 3%.

Despite these data, money markets only price in 56 basis points of rate cuts by the Federal Reserve during 2026, according to Prime Market Terminal data. This contained expectation keeps a low floor for bullish pressure on the precious metal.

Technical Outlook: Consolidation in a Critical Zone

From a technical perspective, gold maintains its underlying bullish trend but faces an important inflection point. A daily close below Wednesday’s low of $4,423 could trigger a test toward the $4,400 level. The Relative Strength Index (RSI) remains above its neutral line, although it shows upward momentum that is moderating.

To confirm a continuation of the bullish move, the XAU/USD needs to break above $4,500, which would clear the way toward the all-time high of $4,549 and levels near $4,600. Otherwise, if the price falls below $4,400, the first support would be at the 20-day simple moving average of $4,376. A break below this level would expose support at $4,300, and in case of further weakness, the bullish trend could be compromised if the metal drops below $4,274, the most recent cycle low.

Upcoming Days: Employment Data in Focus

The US economic calendar for Friday includes the release of December Non-Farm Payrolls, which are projected to show an increase of 60K jobs, below the 64K in November. The Unemployment Rate is expected to decrease from 4.6% to 4.5%. These data could determine the direction of the Dollar and, consequently, the gold price movement in the coming sessions.

The Federal Reserve Bank of Atlanta increased its GDP growth estimate for the last quarter of 2025 from 2.7% to 5.4%, reflecting the resilience of the US economy and providing additional support to the strength of the Dollar.