Gold (XAU/USD) extended its intraday gains during early European trading on Friday, although the metal continues to trade within the broader range that has capped price action since the start of the week. Fresh selling pressure on the US Dollar (USD), which has fallen back toward Thursday’s lowest levels since late October amid dovish Federal Reserve (Fed) expectations, remains a key driver supporting the non-yielding metal.
Cautious market sentiment and persistent geopolitical tensions linked to the prolonged Russia-Ukraine conflict are also underpinning safe-haven demand. However, XAU/USD bulls appear reluctant to initiate aggressive positions ahead of September’s Personal Consumption Expenditures (PCE) Price Index, a critical release that will shape expectations for the Fed’s rate-cut trajectory and provide new momentum for gold.
Daily digest market movers: gold supported by dovish fed outlook and cautious sentiment
Data from Challenger, Gray & Christmas showed that planned US job cuts fell sharply by 53% to 71,321 in November, down from 153,074 in October—the highest October reading since 2003. Separately, US Initial Jobless Claims dropped to 191K for the week ending November 29, marking the lowest level in more than three years.
Despite this supportive labor data, markets continue to price in over an 85% probability that the Fed will cut rates by 25 basis points at next week’s meeting. This expectation is preventing the USD from building on its modest recovery seen on Thursday and continues to act as a tailwind for gold through Friday’s Asian session.
Geopolitical risk also remains elevated after Russian President Vladimir Putin rejected elements of a proposed
US peace plan for Ukraine and reiterated that Ukrainian forces must withdraw from the Donbas region or face further Russian advances. These tensions continue to boost safe-haven demand for gold.
Market focus now shifts to the September US PCE Price Index. Headline PCE is expected to edge up slightly to 2.8% year-over-year from 2.7% in August, while the core PCE—considered the Fed’s preferred inflation gauge- is projected to remain steady at 2.9%.
Investors will scrutinize the data for clearer guidance on the Fed’s policy path, as it will likely determine USD direction and provide fresh impetus for gold. Until then, the mixed fundamental backdrop suggests caution, with XAU/USD poised to register modest weekly losses.
Gold bulls look for acceptance above $4,245–4,250 before extending gains
Gold’s upward momentum continues to face resistance near the $4,245–4,250 zone, where mixed technical signals on both hourly and daily charts limit bullish conviction. A clean break above this region would expose the next hurdle at $4,277–4,278, followed by the $4,300 psychological mark. Sustained strength beyond $4,300 could act as a key trigger for further upside.
On the downside, pullbacks toward the weekly low around $4,164–4,163 are likely to attract buyers. A decisive break below that level, however, could open the door to deeper losses toward the $4,100–4,090 confluence, which includes the 200-period EMA on the 4-hour chart and a rising trendline from late October. This region is expected to serve as a strong technical base for XAU/USD.
