Gold prices ease from fresh all-time highs on Tuesday as the US Dollar stages a modest rebound following a mixed batch of US economic releases. XAU/USD trades near $4,457 at the time of writing, retreating from an intraday peak around $4,497 recorded earlier in the session.
Downside limited by geopolitics and Fed easing bets
Despite the pullback, losses in Gold remain contained as elevated geopolitical tensions continue to underpin safe-haven demand. At the same time, expectations that the Federal Reserve could extend its rate-cut cycle into 2026 provide an additional tailwind for the non-yielding metal.
Year-end repositioning ahead of the long holiday period has also contributed to recent volatility, with some profit-taking emerging at stretched levels. Even so, the broader trend remains firmly constructive, with Gold on track for its strongest annual performance since 1979, up nearly 70% year to date.
Market movers shape near-term sentiment
Recent US data painted a mixed macro picture. The US Bureau of Economic Analysis reported that the economy expanded at a robust 4.3% annualized pace in Q3, beating the 3.3% market forecast and the prior 3.8% estimate. Inflation components within the GDP report remained firm, with the GDP Price Index rising 3.7%, Core Personal Consumption Expenditures increasing 2.9%, and headline PCE Prices climbing 2.8%. In contrast, Durable Goods Orders fell 2.2% in October, reversing September’s 0.7% gain, while orders excluding defense declined 1.5% and orders excluding transportation rose a modest 0.2%. Industrial Production slipped 0.1% month-on-month in October.
The US Dollar Index trades near 98.10, recovering slightly after dipping to an intraday low around 97.85. Meanwhile, geopolitical tensions between the United States and Venezuela remain elevated after President Donald Trump imposed a blockade on sanctioned oil tankers entering and leaving Venezuela. US authorities have already seized two Venezuelan-linked oil tankers this month, reinforcing risk-off sentiment.
Fed outlook remains divided
Markets continue to price in two rate cuts in 2026, following a cumulative 75 basis points of easing this year, although policymakers remain divided. Fed Governor Stephen Miran said recent data should push policymakers in a more dovish direction, warning that failing to ease could raise recession risks. In contrast, Cleveland Fed President Beth Hammack signaled no urgency for further cuts, citing persistent inflation risks and suggesting rates could remain in the 3.50%–3.75% range into the spring.
Attention is also turning to a potential leadership change at the Federal Reserve, with Chair Jerome Powell’s term set to end in May 2026. President Trump has repeatedly indicated a preference for a Fed chair supportive of lower interest rates, with reports suggesting an announcement could come as early as January.
Technical analysis: bullish structure intact despite overbought signals
From a technical perspective, XAU/USD remains in uncharted territory after clearing the October 20 high near $4,381. The broader bullish structure stays intact, with the 9-day Simple Moving Average crossing above the 50-day SMA and both indicators sloping higher. Prices hold comfortably above key moving averages, with the 9-day SMA near $4,348 providing initial dynamic support.
Momentum indicators remain supportive, as the MACD line extends above the signal line in positive territory and the histogram continues to expand. However, the Relative Strength Index sits near 81, signaling overbought conditions that could cap near-term upside and encourage consolidation. Any pullback is likely to find stronger support near the 50-day SMA around $4,161, while sustained closes above short-term averages would keep the broader bullish bias firmly in place.
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