Key Points
- Spot gold rose 0.17% to $4,133.40 after touching an intraday high of $4,148.86.
- Markets now price a 68% chance of a 25 bps Federal Reserve rate cut next month.
Gold prices climbed above $4,130 per ounce on Wednesday, marking their fourth consecutive session of gains, as traders grew more confident that the Federal Reserve will resume monetary easing in December.
Private US employment data revealed that companies shed an average of 11,250 jobs per week in the four weeks ending October 25, suggesting a cooling labour market that strengthens the case for further rate cuts.
The renewed dovish outlook comes as the US government prepares to end its longest-ever shutdown, easing some uncertainty in the near term but keeping focus on the broader slowdown in employment growth and consumer activity.
Fed Policy Expectations Drive Demand
Traders currently assign a 68% probability of a 25 basis point cut at the Fed’s next meeting. The combination of soft labour data and lingering fiscal disruptions has renewed interest in gold as a hedge against policy risk.
While a government reopening could briefly reduce safe-haven demand, expectations for looser financial conditions continue to underpin bullion. Analysts note that declining US yields and a softer dollar remain key supports for the metal’s strong year-to-date rally—its best annual performance since 1979.
Technical Analysis
Gold is trading around $4,133, holding steady after rebounding from a session low near $4,074. The 15-minute chart shows short-term consolidation following a strong rally that briefly tested resistance at $4,148, with moving averages (5, 10, 30) starting to flatten as momentum eases.
The MACD has crossed lower but remains close to the signal line, indicating mild profit-taking rather than a full reversal.
If gold holds above $4,120, buyers could attempt another push toward $4,150–$4,160 in the short term. However, a drop below $4,100 would likely signal fading bullish momentum and invite a deeper retracement toward $4,070. Overall, sentiment remains cautiously bullish, with traders watching upcoming U.S. CPI data for clues on whether the Fed’s easing path will accelerate.
Cautious Forecast
Gold’s broader trend remains constructive as markets lean toward policy easing. If upcoming data continue to show weakness in employment and consumer spending, prices could extend toward $4,160–4,180 in the short term.
However, if the official reopening of the US government triggers a short-lived recovery in the dollar or Treasury yields, gold may temporarily consolidate between $4,080–$4,120 before resuming its upward trajectory.
