Gold (XAU/USD) stays on the back foot in early European trading on Monday, though sellers lack conviction as the metal hovers just above $4,050, down 0.35% on the day.
Mixed commentary from US Federal Reserve (Fed) officials has revived expectations for a potential December rate cut, limiting the US Dollar’s (USD) ability to extend last week’s advance. At the same time, escalating geopolitical risks – from an intensifying Russia-Ukraine conflict to renewed tensions in the Middle East – continue to offer a layer of support to the safe-haven asset.
Traders are now in wait-and-see mode ahead of a heavy US data calendar, including Q3 GDP and the Fed’s preferred inflation gauge, the PCE Price Index. Until then, the USD is consolidating just below its strongest level since late May, while improving sentiment across equity markets is adding mild pressure on gold, keeping XAU/USD bulls cautious about betting on a sustained recovery.
Daily digest market movers: Gold stays pressured as USD bulls look past renewed Fed cut expectations
New York Fed President John Williams signaled that monetary policy is only “modestly restrictive” and suggested there may be room for rate cuts in the near term. Markets reacted swiftly, pricing in roughly a 67% probability of a December rate cut.
However, hawkish remarks from other officials—most notably Dallas Fed President Lorie Logan, who argued for keeping rates unchanged—helped the USD retain last week’s momentum, weighing on gold during the Asian session.
Meanwhile, revived expectations of a December rate cut boosted risk appetite, with most Asian equity markets turning higher on Monday and clawing back recent losses. The improved tone in risk assets has further limited demand for gold.
Geopolitical risks remain elevated. Ukraine launched a major drone attack on a Russian power and heating station near Moscow, while Russia claimed new territorial gains in eastern Ukraine. In parallel, US President Donald Trump has reportedly given Ukraine until November 27 to approve a 28-point peace framework. Kyiv is pushing back against aspects of the proposal that incorporate several hardline Russian demands, keeping uncertainty elevated and offering underlying support to gold.
Attention now shifts to a packed US data docket: the delayed release of PPI, Retail Sales, and the Conference Board’s Consumer Confidence Index on Tuesday, followed by Q3 GDP and the PCE Price Index on Wednesday. The PCE data, in particular, will be crucial for shaping expectations around the Fed’s rate-cut trajectory and could drive the next significant move in USD and gold.
Gold bears eye a confirmed break below $4,030 before extending downside
Technically, XAU/USD continues to defend an ascending trendline from late October, currently aligned with the 200-period EMA on the 4-hour chart around $4,030.
This confluence remains a key pivot zone; a decisive break below it would expose the $4,000 psychological level and last week’s lows near $3,968–3,967. A deeper slide could open the door toward $3,931, followed by $3,900 and the late-October low around $3,886.
On the upside, immediate resistance is seen at $4,080, followed by $4,100. A sustained break above this region would strengthen bullish momentum, targeting the next resistance at $4,152–4,155, with scope for a move toward the $4,200 handle.
