Key Points
- Spot gold rose 0.5% to $3,996.72 per ounce, while U.S. December futures gained 0.3% to $4,004.40.
- Traders now see a 69% chance of a Fed rate cut in December, up from 60% in the previous session.
Gold traded firmer on Friday, recovering toward the $4,000 handle after a softer dollar and weaker labour signals reignited expectations of another Federal Reserve rate cut before year-end.
The extended U.S. government shutdown has curtailed the flow of official economic data, prompting traders to lean on private-sector surveys that suggest a cooling job market.
The yellow metal gained 0.5% to $3,996.72, while futures advanced 0.3% to $4,004.40. Traders increased bets on easier policy, pricing in a 69% probability of a rate cut at the Fed’s 10 December meeting.
Non-yielding gold typically benefits in a low-interest-rate environment, and the combination of soft data and fiscal gridlock in Washington has encouraged defensive positioning among investors.
Labour Market Weakness Supports Safe-Haven Flows
Recent data shows the U.S. economy shed jobs in October, particularly in government and retail, with rising layoffs tied to automation and cost-cutting. Challenger reports pointed to a jump in announced job cuts, reinforcing the view of labour market fatigue.
Benchmark U.S. 10-year Treasury yields, which touched a one-month high on Thursday, pulled back as traders sought safety in bonds and bullion. With major stock indices slipping, gold regained its appeal as a hedge against both policy and equity volatility.
Technical Analysis
Gold (XAU/USD) hovered near $4,000, recovering from earlier dips as buyers cautiously returned to the market. The 15-minute chart shows the metal consolidating after reaching an intraday high near $4,019, with short-term moving averages (5, 10, 30) beginning to converge, suggesting stabilisation.
The MACD has crossed into positive territory, indicating that bullish momentum may be regaining strength after a brief correction.
The recent bounce reflects renewed safe-haven demand as traders weigh soft U.S. labour data and dovish expectations for the December Fed meeting.
Markets are now pricing in a roughly 60% chance of a rate cut, while geopolitical unease in the Middle East continues to support defensive positioning.
However, the firm dollar and resilience in U.S. Treasury yields remain near-term headwinds, keeping gold from making a clean breakout above the $4,020–$4,030 zone.
If gold holds above $3,990, buyers could push for a retest of the recent high and potentially aim for $4,050. A failure to maintain this level, however, risks a retreat toward $3,950, where deeper profit-taking could emerge.
For now, sentiment remains cautiously bullish. Gold’s broader trend stays intact, but its next decisive move will hinge on how the Fed frames its policy stance in the coming weeks.
Cautious Forecast
If the weak jobs narrative persists and the Fed continues to signal policy flexibility, gold could extend gains toward the $4,050–4,080 range. A break above $4,020 would reinforce the bullish outlook, targeting a retest of $4,100.
However, if policymakers adopt a more guarded tone or if yields rebound, prices may consolidate between $3,950–$4,000. The broader trend remains supported while gold holds above the $3,940 level, keeping the bias modestly upward.
