GOLD retreats slightly, market gains bets on easing cycleOANDA:XAUUSD edged slightly lower after a strong rally yesterday, as the market continued to expand expectations that the Federal Reserve will begin its rate-cutting cycle as early as December. This development occurred despite positive U.S. economic data, indicating that the main support for gold now comes more from monetary policy expectations than from growth signals.
U.S. Treasury yields fell and the U.S. Dollar weakened, with the DXY index down 0.20% to 99.60, helping gold maintain its recovery momentum. Although initial jobless claims fell to 216,000 — the lowest since April — and durable goods orders rose more strongly than expected, these data had little impact on rate-cut expectations.
According to FedWatch, the probability of a Fed rate cut at the December meeting remains near 85%, a sharp increase from below 30% last week.
Geopolitical conditions, however, are shifting in a direction less supportive of gold. Signs suggest Russia and Ukraine are moving closer to a de-escalation agreement, with consultations in Geneva and positive remarks from both sides reducing the geopolitical risk premium that has supported gold for months. A Russian adviser told Al Jazeera that the U.S. plan contains “many positive aspects,” implying that diplomatic progress may be approaching.
Even so, the Fed’s policy outlook remains the dominant driver. JPMorgan Chase has reversed its forecast and now expects the Fed to cut rates in December instead of delaying until January. Michael Feroli’s economics team cited dovish comments from key Fed officials — especially New York Fed President Williams — as the reason for the shift. JPMorgan had previously expected the Fed to stay put after the September jobs report.
A new variable also attracting attention is the selection process for the next Fed Chair. Bloomberg reports that White House economic adviser Kevin Hassett — seen as dovish — has emerged as a leading candidate. The likelihood of a more dovish Fed leadership further strengthens expectations of rate cuts, pressuring the dollar and supporting gold. Treasury Secretary Bessant said the nomination could be announced before Christmas.
Overall, markets perceive that the key question now is how quickly the Fed can implement the rate-cutting cycle. Karl Schamotta of Corpay noted that markets are leaning toward expectations of more aggressive easing. In a similar move, Deutsche Bank raised its 2026 gold price forecast to 4,450 USD/oz, based on steady investment inflows and rising central bank gold-reserve demand.
While geopolitical risks appear to be easing, the outlook for U.S. monetary policy continues to be the primary driver shaping gold’s direction in the short and medium term.
Technical Analysis OANDA:XAUUSD
Gold price is maintaining the main uptrend on the daily timeframe, still moving within the ascending channel established since August. The latest session closed around 4,147 USD/oz, trading above the short-term MA21 and approaching the technical resistance zone at 4,128 (Fib 0.236) and the major resistance at 4,216 USD.
• Structure: Series of higher lows + rising channel intact → underlying trend remains bullish.
• Key support: 3,972–4,000 USD (Fib 0.382 + channel lower boundary/MA21). If this zone holds, the bullish outlook remains valid.
• Short-term resistance: 4,128 USD (Fib 0.236). A breakout above this level opens the path toward 4,216 USD and beyond.
• Momentum: RSI rebounded from the neutral zone → buying pressure has returned but remains moderate; no clear bearish divergence.
• Conclusion: Market structure remains bullish, but confirmation is needed via a breakout above 4,128 USD to validate a new bullish cycle.
Summary:
The main trend is still upward, but the market is awaiting a confirmed breakout of the 4,128–4,216 USD zone to enter a strong bullish phase. If price falls below 3,972–4,000 USD, the plan should be reassessed due to the risk of a pullback toward the 3,846 zone (Fib 0.5).
Trading Plan
SELL XAUUSD — 4195–4193 ⚡️
Stop Loss: 4199
Take Profit 1: 4187
Take Profit 2: 4181
BUY XAUUSD — 4109–4111 ⚡️
Stop Loss: 4105
Take Profit 1: 4117
Take Profit 2: 4123
