Gold (XAU/USD) begins the week on a subdued note, holding above $4,050 after last week’s two-day pullback from a three-week high. At around $4,080, upside momentum remains capped by a stronger US Dollar and reduced expectations for a December Federal Reserve rate cut.
Market participants are cautious ahead of a heavy slate of delayed US economic releases following the government shutdown. The key focus is Thursday’s September Nonfarm Payrolls report, which is expected to offer the first meaningful update on labor conditions in weeks. Gold also remains sensitive to the Fed’s cautious tone, with FOMC Minutes due later this week, keeping the metal largely range-bound for now.
Market Drivers: Stronger Dollar, Reduced Fed Cut Bets
- The US Dollar Index (DXY) has extended its rebound to around 99.42, rising for a second straight session after falling to two-week lows last week.
- Gold’s safe-haven appeal has eased as the US government shutdown ends and trade tensions surrounding US tariffs calm, though broader geopolitical and economic risks still lend underlying support.
- The Bureau of Labor Statistics announced revised dates for delayed releases, with the September Employment Situation report now due on November 20 and September Real Earnings set for November 21. The agency was unable to fully collect October CPI data, raising the possibility that the report may not be published.
- Fed rate-cut expectations have cooled sharply, with the CME FedWatch Tool showing only a 44% chance of a December cut—down from 94% a month ago.
- Monday’s US data includes the November Empire State Manufacturing Index, followed by speeches from several key Fed officials: John Williams, Philip Jefferson, Christopher Waller, and Neel Kashkari.
Technical Outlook: Gold Holds Above 100-SMA but Momentum Weak
Gold remains range-bound, with repeated support forming around the 100-period SMA near $4,043—also the upper end of the prior consolidation area, reinforcing its significance as a key support zone.
- Support: A break below $4,040–$4,050 would move XAU/USD back into the broader $4,050–$3,900 range. If $4,000 fails, the door opens toward $3,900.
- Resistance: Initial resistance lies at $4,100, followed by a stronger barrier near $4,150 (aligned with the 21-period SMA). A sustained move above this area would target the $4,250 region.
- Momentum: The RSI near 41 signals weak buying pressure, keeping the short-term outlook tilted slightly in favor of sellers.
Gold FAQs
Why do people invest in Gold?
Gold is seen as a safe-haven asset, a store of value, and a hedge against inflation and currency depreciation, making it a preferred investment during periods of uncertainty.
Who buys the most Gold?
Central banks are the largest holders of Gold. They accumulate Gold to strengthen currency reserves and support financial stability. In 2022, central banks purchased 1,136 tonnes—the highest level on record—led by emerging markets such as China, India, and Turkey.
How does Gold correlate with other assets?
Gold typically moves inversely to the US Dollar and US Treasury yields. It also tends to weaken when equities rally and strengthen when risk appetite declines.
What drives Gold prices?
Gold responds to geopolitical risks, recession fears, interest-rate expectations, and especially movements in the US Dollar, since it is priced in USD. Lower interest rates typically support Gold, while higher rates weigh on it.
