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Gold Prices Rise as December Rate-Cut Expectations Hit 85%
Gold (XAU/USD) kicked off the week with renewed vigor as expectations for a December Federal Reserve rate cut gained traction. Despite a slowdown in trading activity over the US Thanksgiving holiday, the metal still advanced more than 2% on the week, supported by growing dovish sentiment among Fed officials.
Fed Silence Ahead: Markets Turn to Data
With the Fed entering its pre-meeting blackout period, traders have shifted their attention to incoming economic data for clarity on the December policy decision. Earlier in the week, gold received a boost after Fed Governor Stephen Miran signaled he would back a 25-basis-point cut if his vote proved decisive—an adjustment from his prior preference for a 50 bps move.
New York Fed President John Williams echoed a softer tone, noting that policy remained “modestly restrictive” and suggesting room for further adjustment.
The metal surged more than 1.5% on Monday, building modestly on Tuesday before stabilizing. US data released midweek—216,000 initial jobless claims and stronger-than-expected durable goods orders—did little to alter rate-cut expectations, and gold held firm above $4,100 heading into the holiday.
Key US Data to Watch This Week
According to CME FedWatch estimates, markets now price in roughly an 85% probability of a December cut. With Fed officials silent until December 9–10, traders will monitor upcoming releases, starting with Monday’s ISM Manufacturing PMI. A stronger employment index could lend support to the US dollar and weigh on gold.
Wednesday’s ISM Services PMI may prove more influential; a dip below 50 would signal contraction and potentially bolster gold. Investors will also watch Thursday’s Challenger Job Cuts data following October’s surge to 153,074 layoffs. Friday’s PCE Price Index release, covering September due to reporting delays, is expected to have minimal market impact.
Short-Term Trend Stays Constructive
Gold continues to trade comfortably above the 20-day SMA and the 23.6% Fibonacci retracement at $4,125, with the RSI hovering near 60. Support lies at $4,125, followed by $4,085, $4,030, and $3,970. On the upside, resistance levels stand at $4,245, $4,300, and $4,380.
