Gold (XAUUSD) came under intense selling pressure on Friday, with bulls unable to defend early advances amid a mixed risk environment. At the time of writing, XAU/USD trades near $4,050, down more than 2.5% intraday, wiping out the bulk of this week’s upswing after pulling back from Thursday’s three-week high at $4,245.
Relief following the end of the US government shutdown has reduced Gold’s safe-haven appeal, while a wave of cautious commentary from Federal Reserve (Fed) officials has led markets to scale back expectations for a December rate cut. With near-term easing prospects fading, the US Dollar (USD) has regained traction from recent lows, adding further pressure on the non-yielding metal.
Traders now await the release of delayed US macroeconomic data for clearer signals on the Fed’s policy path. Meanwhile, renewed worries over stretched AI-related equity valuations are weighing on global stocks and curbing risk appetite—factors that could partially cushion Gold’s downside as the metal heads for a weekly advance.
Market movers: usd recovers as fed pushes back on december cut
The US Dollar Index (DXY) is staging a modest rebound from two-week lows, trading around 99.37 and up roughly 0.20% on the session.
Markets broadly welcomed the reopening of the US government, though concerns remain elevated as the stopgap bill only funds federal operations through January 30, 2026, with select departments extended to September 30, 2026—leaving another shutdown threat looming.
Regarding delayed economic releases, White House Senior Adviser Kevin Hassett told Fox News on Thursday that September nonfarm payrolls could be published next week. For October, he noted that only the employment component will be released, while the unemployment rate will remain absent.
Fed officials maintained a cautious tone on Thursday, reinforcing the view that a rate cut is not guaranteed. San Francisco Fed President Mary Daly said it is “premature to say definitely a cut or no cut in December,” noting that the labor market has softened and inflation—while easing—remains stubborn. Boston Fed President Susan Collins highlighted a “relatively high bar for additional easing in the near term,” warning that further policy support risks slowing progress toward the 2% inflation target.
St. Louis Fed President Alberto Musalem urged caution, saying there is “limited room for further easing,” while Minneapolis Fed President Neel Kashkari reiterated his opposition to the October cut and said he remains undecided on December.
Market pricing has shifted sharply, with the CME FedWatch Tool showing a 49% probability of a December rate cut—down from 94% a month earlier. Traders will monitor upcoming Fed remarks later today for additional clarity on the policy outlook.
Technical analysis: xau/usd retreats after rejection near $4,250
XAU/USD has lost momentum following a strong breakout earlier in the week, with the advance stalling in the $4,200–$4,250 resistance band where sellers have reasserted control.
Immediate support sits near $4,050, and a confirmed break below this zone would open the door for a deeper pullback toward $4,000. On the upside, a decisive move above $4,250 is required to reignite bullish momentum and target the all-time high region around $4,318.
Momentum indicators are cooling, with the Relative Strength Index (RSI) slipping below 50, signaling waning buying pressure after the recent rally.
