Gold (XAU/USD) extended its rally during Monday’s Asian session, hitting its highest level since October 21 and appearing well positioned to build on last week’s robust gains.
Growing expectations that the Federal Reserve (Fed) will deliver another rate cut this month have fueled the latest move, after a series of dovish comments from Fed officials. The softer policy outlook has pushed the US Dollar (USD) to its lowest level in nearly two weeks, providing additional support for the non-yielding metal.
At the same time, a cautious market tone and rising geopolitical tensions – particularly from the escalating Russia-Ukraine conflict – have reinforced safe-haven demand for gold. Still, the rally has paused for now, as traders await key US economic data releases this week. The first major print arrives today with the ISM Manufacturing PMI, making investors hesitant to add fresh bullish positions in the near term.
Daily digest market movers
The dovish shift from Fed Governor Christopher Waller and New York Fed President John Williams has strengthened expectations for a December rate cut. Last week’s mixed US economic data failed to challenge this view, keeping gold supported.
In US political developments, White House economic adviser Kevin Hassett signaled on Sunday that he would be willing to serve as the next Fed chair if appointed by President Donald Trump. Markets expect Hassett to endorse Trump’s push for significantly lower interest rates, a factor that helped lift gold to a six-week peak during Asian trading.
The weaker USD continues to act as a tailwind for the precious metal, while a subdued tone across Asian equity markets adds to the bid for safe-haven assets.
Fresh data from China also weighed on sentiment after a private survey showed that the country’s manufacturing activity unexpectedly slipped back into contraction. This followed Sunday’s official PMI release, marking an eighth consecutive month of shrinkage amid persistent geopolitical concerns.
On the geopolitical front, Ukrainian naval drones struck two Russian “shadow fleet” tankers in the Black Sea. Meanwhile, US Secretary of State Marco Rubio described recent talks with Ukrainian officials as productive but emphasized that more work is needed to move toward ending the conflict.
Looking ahead, investors will focus on today’s US ISM Manufacturing PMI for short-term direction. Broader USD sentiment and a series of high-impact US data releases scheduled throughout the week will shape the near-term trajectory of XAU/USD.
Gold technical setup
A sustained break above the $4,250 zone would signal fresh momentum for bulls and open the door to further upside. With daily chart oscillators trending higher, gold could target the $4,277–4,278 area next, followed by a potential move toward the $4,300 mark.
On the downside, support is now seen around the Asian session low near $4,200. Any additional pullback is likely to attract buyers, with stronger support expected near the $4,155–4,153 region. A decisive break below this level could trigger technical selling and expose gold to a deeper decline toward $4,100, followed by the $4,073 confluence zone – defined by the 200-period EMA on the 4-hour chart and an ascending trendline from late October.
