Gold (XAU/USD) maintains modest intraday gains in early Wednesday trading, supported by sustained weakness in the US Dollar (USD) as markets increasingly expect another Federal Reserve (Fed) rate cut next week. The Greenback trades near its lowest level since November 13, helping the non-yielding metal extend Tuesday’s late rebound from the $4,164–4,163 area.
Geopolitical tensions lend support, but risk appetite limits upside
Lingering geopolitical tensions tied to the Russia-Ukraine conflict continue to underpin safe-haven demand, lifting gold back toward Monday’s one-month high. However, a broadly constructive tone in global equities is limiting bullish momentum, leaving XAU/USD traders cautious ahead of key US data releases.
Daily digest: gold finds support as USD softens on fed expectations
Recent US data has signaled a gradual cooling in economic activity, while dovish commentary from Fed officials has reinforced expectations for a 25-basis-point cut at next week’s FOMC meeting.
According to the CME FedWatch Tool, markets are pricing in nearly a 90% probability of such a move, keeping the USD on the defensive and supporting gold.
Speculation surrounding Fed leadership is adding to the narrative. Reports suggest White House National Economic Council Director Kevin Hassett remains the frontrunner to succeed Jerome Powell, aligning with President Donald Trump’s calls for lower rates – a prospect that investors view as USD-negative.
Geopolitical developments also remain in focus. Russian President Vladimir Putin and US envoy Steve Witkoff failed to make progress toward a Ukraine peace deal, while Putin issued fresh warnings signaling that Russia is prepared for conflict with Europe. These developments continue to bolster safe-haven flows into gold, though traders appear hesitant to commit to fresh longs until upcoming US macro data is released.
Later today, markets will watch the ADP private-sector employment report and the ISM Services PMI for November. The key focus, however, remains Friday’s US Personal Consumption Expenditure (PCE) Price Index – the Fed’s preferred inflation gauge – which will be critical for shaping expectations around the central bank’s rate-cut path and influencing near-term USD dynamics.
Gold technical outlook: bulls eye $4,300 once $4,245–4,250 breaks
Gold’s rebound from the $4,155–4,150 support zone and its sustained move higher keep the bullish bias intact. A decisive break above the strong $4,245–4,250 resistance area could pave the way for a test of the weekly highs near $4,264–4,265 and the $4,277–4,278 region, potentially opening the door toward the $4,300 psychological level.
On the downside, any dip below $4,200 is likely to attract fresh buying interest, with solid support expected ahead of $4,150. A break below this pivotal zone would expose the metal to further declines toward $4,100 and the $4,075–4,073 confluence region, marked by the 200-period EMA on the 4-hour chart and a rising trendline from late October.
