Gold is shrugging off Tuesday’s small dip and pushing to multi-day highs above $4,170 per troy ounce on Wednesday. The move higher comes as the US Dollar (USD) loses some steam again, even though US Treasury yields are trying to rebound across the curve.
Zooming out, the yellow metal is still on track for its fourth straight monthly gain, building on October’s impressive rally toward the $4,400 mark. Geopolitical tensions and ongoing chatter about more Federal Reserve (Fed) rate cuts have kept the bullish momentum alive for the time being.
That said, a friendlier risk mood, especially if peace-talk prospects between Russia and Ukraine improve, could limit safe-haven demand and cool some of the upside.
Even so, the broader narrative continues to favour bullion: Markets are leaning into the idea that the Fed could deliver another cut at the December 10 gathering, helping support prices on any dips.
Right now, traders are assigning around a 76% probability to a December cut and are pricing close to 91 basis points of easing by end-2026. Meanwhile, despite stronger-than-expected US Initial Jobless Claims and decent Durable Goods Orders, the Greenback is still having trouble finding buyers, even as Treasury yields grind a little higher on Wednesday.
With US markets heading into the Thanksgiving Day holiday on November 27, the precious metal could spend some time consolidating recent gains as volatility typically thins out around the holiday period.
Technically speaking
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If buyers stay in charge, the first hurdle to watch is the November peak at $4,245 (November 13). Beyond that, the big prize remains the record high at $4,380 (October 17).
On the flip side, if sellers push back, the 55-day SMA around $3,977 should offer an initial cushion. Below that, there’s support at the weekly floor of $3,886 (October 28), followed by the 50% Fibonacci retracement of the May–October upswing near $3,750.
For now, momentum still leans bullish: the Relative Strength Index (RSI) is heading toward 60, and with the Average Directional Index (ADX) holding above 19, the underlying trend looks like it’s slowly gaining strength.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.