Gold (XAU/USD) retreated from early gains on Friday, slipping nearly 1.5% to trade around $4,100 after dipping to $4,032 earlier in the session. The metal is losing momentum as the US Dollar stabilizes and traders reassess the Federal Reserve’s near-term policy path. Relief over the end of the US government shutdown has also stripped some safe-haven appeal from Gold.
Mixed remarks from Fed officials have prompted markets to dial back expectations of a December rate cut, supporting the Dollar and weighing on the non-yielding metal. Still, lingering concerns over stretched AI valuations are pressuring global equities, capping Gold’s downside as it heads for a weekly gain.
Market movers: usd rebounds as fed officials push back on near-term cuts
The US Dollar Index is rebounding from two-week lows, trading near 99.37 and up nearly 0.20% on the day. While markets welcomed the government’s reopening, the temporary funding bill only extends operations through January 30, 2026, leaving another shutdown risk on the horizon and keeping sentiment fragile.
Uncertainty over delayed US economic data continues to cloud the outlook. White House Senior Adviser Kevin Hassett said September’s nonfarm payrolls could be released next week, but October’s report may be incomplete, with only the jobs component expected and no unemployment rate.
Fed officials maintained a cautious tone on Thursday. San Francisco Fed President Mary Daly said it is “premature to say definitely a cut or no cut in December,” acknowledging a cooling labor market but still-sticky inflation. Boston Fed President Susan Collins said there is a “high bar” for near-term easing, noting the risk of stalling progress toward the 2% inflation target.
St. Louis Fed President Alberto Musalem warned that there is “limited room for further easing,” while Minneapolis Fed President Neel Kashkari repeated his opposition to the October cut and remains undecided on December.
According to the CME FedWatch Tool, markets now assign a 49% probability to a December rate cut, sharply lower than the 94% priced a month ago. Additional Fed remarks later today could further shift expectations.
Technical analysis: xau/usd retreats after rejection near $4,250
Gold’s rally faded after the metal broke out from its recent consolidation zone and stalled within the $4,200–$4,250 resistance band, where renewed selling pressure has emerged. Momentum indicators are softening, with the RSI sliding below 50 and signaling fading bullish strength.
Immediate support sits around $4,050, and a sustained move beneath this level could expose the $4,000 handle. On the upside, a decisive break above $4,250 is needed to reestablish bullish momentum and target the all-time high region near $4,318.
