Gold prices extended their advance on Wednesday, climbing above $4,100 for the second straight day. The metal is benefiting from increased risk aversion in global markets and growing expectations that the US Federal Reserve could ease monetary policy at its December meeting.
On Tuesday, US employment data came in weaker than expected. Initial Jobless Claims rose, and the ADP Weekly Employment Change showed businesses continued to cut jobs in the four weeks leading up to November 1. These soft labor indicators heighten pressure on the Federal Reserve to pursue additional rate cuts, though traders are likely to wait for Thursday’s Nonfarm Payrolls report before drawing firm conclusions.
Technical Outlook: Signs of a Potential Trend Reversal for Gold
Gold rebounded sharply from the 78.6% Fibonacci retracement of its early November rally near $4,000. The metal is now challenging resistance around $4,105 (the November 17 high). On the 4-hour chart, the RSI has recovered from the 50 level, and the MACD is close to crossing above its signal line—both signals suggesting the pullback from $4,145 may have run its course.
If XAU/USD holds above $4,100, bullish momentum could strengthen, paving the way for a test of former support at $4,150 (November 13 low), followed by resistance at $4,210 (November 14 high) and the monthly peak near $4,245.
On the downside, any rejection from current levels could find support at $4,055, then at Tuesday’s $4,000 low. A deeper decline would expose the November 4 low around $3,930.
Gold FAQs
Why do people invest in Gold?
Gold has been valued throughout history as both a store of wealth and a medium of exchange. Today, it remains a popular safe-haven asset, especially during times of financial uncertainty. It also acts as a hedge against inflation and currency depreciation because it is not tied to any single government or issuer.
Who buys the most Gold?
Central banks are the largest holders of gold. To strengthen their currencies and diversify reserves, they often increase their gold holdings—especially during economic instability. In 2022, central banks purchased 1,136 tonnes of gold, the highest annual total on record, according to the World Gold Council. Emerging economies including China, India, and Turkey have been among the fastest-growing buyers.
How does Gold move relative to other assets?
Gold typically has an inverse relationship with the US Dollar and US Treasury yields. When the dollar weakens, gold tends to rise as investors seek alternative safe-haven assets. It also usually moves opposite to risk assets—stocks rallying can dampen gold demand, while equity sell-offs generally support the metal.
What influences Gold prices?
Gold prices react to geopolitical tensions, recession fears, inflation trends, and interest-rate expectations. Since gold does not yield returns, lower interest rates tend to boost its appeal, while rising rates can pressure prices. Because gold is priced in US dollars, movements in the dollar are often the dominant driver.
