Gold Trims Intraday Losses

 

Gold prices recovered most of their early intraday losses, trading with a slightly bearish bias around the $4,070–$4,075 region. The US Dollar extended Thursday's recovery from its lowest level since late September, putting downward pressure on the precious metal. Meanwhile, a hawkish Federal Reserve outlook contributed to gold's pullback from a two-week high reached in the previous session. However, sellers remained cautious ahead of the release of key US monthly employment data, which could provide a fresh catalyst for the precious metal.

The XAU/USD pair maintains a constructive near-term outlook above a Fibonacci retracement cluster between the 50.0% level at $4,006 and the 38.2% level at $4,039. Nevertheless, the intraday decline below the 100-period Exponential Moving Average (EMA) on the four-hour chart serves as a warning signal for bullish traders.

Furthermore, the Relative Strength Index (RSI) at 52.40 has retreated from overbought territory and now indicates neutral-to-positive momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains in positive territory, with its line holding above zero. The previous expansion in the histogram also suggests that bullish momentum may be temporarily pausing rather than signaling a confirmed reversal.

Therefore, sustained selling pressure below the 38.2% Fibonacci retracement at $4,039 would strengthen the bearish outlook, potentially pushing Gold toward the 50.0% retracement near $4,006. A decisive break below this area could expose the next support levels at the 61.8% retracement of $3,973 and the 78.6% level at $3,926.

On the upside, immediate resistance is located at the 23.6% Fibonacci retracement near $4,080. A sustained move above this level would pave the way for a potential retest of the latest cycle high at $4,146.

The closely watched US Nonfarm Payrolls (NFP) report is expected to show that the economy added 65,000 jobs in October, recovering from the weaker reading of 29,000 recorded in the previous month. Meanwhile, the unemployment rate is forecast to remain unchanged at 4.2%.

Investors will also pay close attention to Average Hourly Earnings, as wage growth pressures could significantly influence expectations for the Federal Reserve's monetary policy. These closely monitored economic indicators are expected to trigger volatility across financial markets and potentially strengthen demand for the US Dollar, creating a meaningful headwind for Gold prices.

Meanwhile, the Democratic Party's victory in the US midterm elections has fueled concerns about a potential slowdown in artificial intelligence development. This triggered a broad sell-off on Wall Street on Thursday and increased demand for traditional safe-haven assets, including US Treasury bonds.

However, a sharp overnight rebound in crude oil prices reignited inflation concerns. In addition, traders are still pricing in approximately a 70% probability that the US central bank will raise borrowing costs again at its December meeting. This expectation has helped limit the decline in US Treasury yields following their midweek slump, providing additional support for the Greenback.

Geopolitical risk premiums also remain relevant amid uncertainty surrounding US President Donald Trump's next move. On Thursday, Trump said the United States might have to destroy what remains of Iran, adding that the public would soon find out whether he would take action.

Furthermore, Washington and Tehran remain divided over Iran's nuclear program and the Strait of Hormuz. These developments provide additional support for the safe-haven US Dollar, which is seen as weighing on Gold prices.

Despite these headwinds, Gold remains on track to post its first weekly gain in three weeks and continues to trade comfortably above the key psychological $4,000 level.

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Gold Pulls Back From Two-Week High

 

Gold prices edged lower from a two-week high reached during Thursday's Asian session, but remained on track for a second consecutive daily gain, trading around the $4,130 level. The US Dollar extended its post-election losses, falling to a fresh low since late September. This weakness helped gold extend its strong rally of more than 3.5% in the previous session, marking its largest single-day gain since mid-August.

On the four-hour chart, XAU/USD maintains a constructive technical outlook following Thursday's breakout above the 23.6% Fibonacci retracement of the August–October decline and the 200-period Simple Moving Average (SMA). Meanwhile, the Relative Strength Index (RSI) stands at 75.77, indicating overbought conditions. The Moving Average Convergence Divergence (MACD) line remains above its signal line, with a widening positive histogram, suggesting that bullish momentum is still intact despite the increasingly extended rally.

The immediate focus is whether gold buyers can push prices above the 38.2% Fibonacci retracement at $4,186 without triggering a corrective pullback due to overbought conditions. The next resistance levels are aligned with the 50.0% Fibonacci retracement at $4,283, followed by $4,380. Further upside barriers are located at $4,518 and $4,695, potentially limiting the broader medium-term recovery.

On the downside, the 200-period SMA near $4,124, followed by the 23.6% Fibonacci level at $4,065, could provide initial support. A decisive break below the latter would expose the next major structural support near the recent cycle low of $3,871.

US Election Results Weigh on the Dollar

The Democrats' decisive victory in the US midterm elections removed one of the major sources of political uncertainty and reduced expectations that US President Donald Trump would pursue further military action against Iran.

On Wednesday, Senate Democratic Leader Chuck Schumer pledged to push for an end to the Iran war, adding that his party could use its influence over government funding to advance that objective. The developments boosted market optimism and sent crude oil prices to a two-month low, easing concerns over inflation.

Meanwhile, expectations that a prolonged fiscal deadlock in Washington could further constrain government spending placed additional downward pressure on US Treasury yields. The combination of weaker yields and a softer US Dollar provided further support for gold prices.

Dollar Reaction Remains Muted Despite Democratic Victory

Analysts at MUFG/BTMU noted that the scale of the Democratic Party's victory, which exceeded previously reported expectations, had not yet been matched by an equally significant reaction in financial markets. So far, both the US Dollar and Treasury yields have recorded only modest declines.

The analysts also highlighted that political developments could remain a decisive factor for the currency. Any subsequent shift in policy or geopolitical risk assessments could potentially reverse the current weakness in the Dollar and US Treasury yields.

Conversely, MUFG/BTMU suggested that if Trump refrains from attacking Iran and interprets voter opposition to his policies as a reason to pursue a diplomatic agreement, the US Dollar could face an extended period of weakness.

This highlights how the administration's post-election policy response could determine whether the current Dollar correction deepens or eventually reverses.

Fed Rate Hike Expectations Remain Elevated

Despite the political shift, market expectations for further monetary tightening by the US Federal Reserve (Fed) have remained largely intact.

According to the CME Group FedWatch Tool, traders continue to price in more than an 80% probability of a Fed rate hike in December.

These expectations received additional support from a stronger-than-expected US ADP employment report, which showed that private-sector employment increased by 86,000 jobs in October 2026, matching the previous month's downwardly revised reading.

Separately, the Institute for Supply Management (ISM) Services PMI declined to 54.5 last month from 54.9 in September. However, the reading remained comfortably above the 50-point threshold, indicating continued expansion in the US services sector.

Global Central Banks Could Limit Gold's Upside

Expectations of further interest rate increases by other major central banks could also limit gains in non-yielding gold.

The Bank of England (BoE) is widely expected to raise its benchmark interest rate by 25 basis points (bps) at its policy meeting later today.

Meanwhile, the minutes of the Bank of Japan's (BoJ) September meeting revealed that policymakers discussed the need for continued and potentially faster interest rate increases.

Markets are also assigning greater probabilities to potential December rate hikes by the European Central Bank (ECB) and the Swiss National Bank (SNB).

Higher interest rate expectations across major economies could increase the opportunity cost of holding gold, making investors more cautious about chasing further gains in the precious metal.

US Nonfarm Payrolls in Focus

Traders may prefer to remain on the sidelines ahead of Friday's closely watched US monthly employment report, known as the Nonfarm Payrolls (NFP).

The upcoming employment data, alongside speeches from influential Federal Open Market Committee (FOMC) members, will be closely monitored for further clues about the Fed's future monetary policy direction.

These developments could influence near-term demand for the US Dollar and determine whether gold can extend its recent recovery.

In addition, any further developments surrounding the Middle East crisis could trigger fresh market volatility and provide another potential catalyst for gold prices.

Overall, gold retains a bullish short-term bias as the weaker US Dollar and declining Treasury yields provide support. However, overbought technical conditions, elevated Fed rate hike expectations, and upcoming US employment data could trigger profit-taking and limit the precious metal's immediate upside.

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Gold Holds Gains

 

Gold Price Forecast: XAU/USD Stays Above $4,000 as US Midterm Elections Weigh on the US Dollar

Gold prices maintained strong intraday gains near their weekly highs on Wednesday, trading comfortably above the psychological $4,000 mark during the early European session. The rally was supported by broad-based US Dollar weakness following the latest developments in the US midterm elections.

Democratic victories in both the House of Representatives and the Senate have increased the likelihood of political gridlock in Washington. Growing political uncertainty has also encouraged investors to seek safe-haven assets, putting downward pressure on US Treasury yields. This combination has weighed on the Greenback while providing additional support for the precious metal.

Gold Technical Analysis: XAU/USD Faces Key Resistance Levels

Despite the recent recovery, XAU/USD maintains a bearish technical bias as it continues to trade below the 100-period Simple Moving Average (SMA) on the 4-hour chart and remains beneath the key Fibonacci retracement levels of the decline from its mid-October peak.

The 23.6% Fibonacci retracement level at $3,947 represents the nearest resistance, followed by the $3,970 zone. Meanwhile, the Relative Strength Index (RSI) stands at 48.94, close to neutral territory, while the Moving Average Convergence Divergence (MACD) remains positive at 6.65. These indicators suggest that bearish momentum is stabilizing, although the recovery is not yet strong enough to challenge the prevailing downward trend.

A sustained break above the $3,970 resistance could open the door toward the 38.2% Fibonacci retracement at $3,995. Further gains could then push Gold toward the 50.0% retracement level at $4,033.

Beyond this level, the 100-period SMA at $4,057, followed by the 61.8% and 78.6% Fibonacci retracement levels at $4,072 and $4,127, respectively, will represent the next major obstacles before the previous cycle peak near $4,197.

On the downside, the key structural support remains around the Fibonacci reference level of $3,869. Buyers could attempt to defend this area if renewed bearish pressure emerges.

Fed Rate Hike Expectations Continue to Limit Gold's Upside

Despite support from a weaker US Dollar, expectations of a more hawkish Federal Reserve (Fed) have prevented Gold from extending its intraday recovery.

According to the CME Group FedWatch Tool, traders are currently pricing in nearly an 80% probability that the US central bank will raise interest rates again at its next policy meeting in December.

These expectations strengthened following Tuesday's release of the US Job Openings and Labor Turnover Survey (JOLTS). The report showed that labor demand remained relatively resilient in September, with job openings increasing to 7.523 million from an upwardly revised 7.190 million in August.

The latest labor market data, combined with resilient economic growth and persistent inflationary pressures, has reinforced expectations of another Fed rate hike.

This outlook continues to weigh on non-yielding assets such as Gold, keeping prices vulnerable below the $3,970 resistance zone despite support from US Dollar weakness.

US-Iran Tensions Keep Geopolitical Risks in Focus

Meanwhile, geopolitical risk premiums remain elevated despite ongoing diplomatic efforts to end the eight-month-long US-Iran conflict.

In the latest developments, US President Donald Trump told the Financial Times on Tuesday that Washington had no immediate plans to launch an attack on Iran, despite Israeli Prime Minister Benjamin Netanyahu hinting at a possible strike later this weekend.

At the same time, a senior Iranian official told Reuters that the Strait of Hormuz would only reopen if sanctions were lifted and the US naval blockade ended.

Iran's Islamic Revolutionary Guard Corps (IRGC) also claimed that four oil tankers had been destroyed after striking mines south of the Strait of Hormuz.

These developments have heightened concerns over potential oil supply disruptions and renewed inflationary pressures stemming from volatile energy prices. Such risks could strengthen the case for further monetary policy tightening by the Federal Reserve, creating another challenge for Gold.

US Economic Data and NFP Report in Focus

Traders are now turning their attention to Wednesday's US economic calendar, which includes the ADP private-sector employment report and the ISM Services Purchasing Managers Index (PMI). Incoming geopolitical developments could also provide fresh trading opportunities for Gold.

However, market attention remains firmly focused on Friday's closely watched US Nonfarm Payrolls (NFP) report, which could influence US Dollar demand and determine the precious metal's near-term direction.

Overall, the combination of political uncertainty, geopolitical tensions, US Dollar weakness, and rising Fed rate hike expectations creates a mixed fundamental backdrop for Gold.

Although XAU/USD has staged a recovery from last Friday's lowest level since September 2025, traders may prefer to wait for stronger follow-through buying before confirming that the precious metal has established a sustainable bottom and is ready to extend its recovery.

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