US Treasury Yields Affect Gold Prices In technical analysis, gold hovers around $4,200, with potential support levels at $4,153 and $4,090 if it falls. A dovish Fed could push gold towards $4,300. Gold serves as a safe investment and a way to protect against rising prices, widely used by central banks for reserves. Its price tends to go up when the US Dollar weakens or when financial markets are unstable, rising during geopolitical tensions or economic troubles. The buying and selling of gold by central banks also affects its market behavior. With the Federal Reserve indicating a cautious approach, we should view the recent rate cut as a single action rather than the beginning of a long trend. While the market has reacted positively, Jerome Powell’s “wait and see” outlook introduces significant uncertainty for the near future. Traders can take advantage of this by preparing for a continued, but potentially unstable, rise in gold towards the $4,300 level. Federal Reserve’s Split Vote The split vote at the Fed, with some members wanting to keep rates unchanged, shows that the future is uncertain. This suggests that using options to manage risk will be essential; we might consider buying call spreads to aim for higher prices while controlling our risk. At the same time, buying protective puts with a strike price below the $4,200 psychological level could safeguard against any surprises from upcoming reports. This tension Powell mentioned is evident in the latest economic reports from November 2025. The Consumer Price Index (CPI) indicated that core inflation remains high at 3.8%, which explains the hesitance of some Fed members to cut rates further. Any future inflation data that shows rising prices will likely strengthen the US dollar and create challenges for gold. On the flip side, the Fed’s concern about employment was confirmed by the recent November 2025 jobs report, which showed a disappointing increase of only 95,000 jobs. This weakness in the job market supports the argument for lower rates and is a positive factor for gold prices. We must pay close attention to the next employment figures, as they will significantly impact the Fed’s future actions. Looking back, this situation resembles the “insurance cuts” we observed from the Fed in 2019, which aimed to support growth rather than combat a severe recession. This historical parallel suggests that we shouldn’t expect a series of aggressive rate cuts unless economic conditions worsen significantly. Therefore, long-term optimistic positions should be tempered with this cautious perspective. Finally, we see strong support for gold from central bank activity, which provides a basic floor for prices. Recent World Gold Council data for the third quarter of 2025 confirmed that central banks bought another 250 tonnes of gold, continuing the trend we’ve seen since 2022. This consistent demand should limit the downside for gold, even if we see short-term declines caused by changes in Fed policy expectations.

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