Gold Holds Firm Ahead of Fed Meeting
published at 12.01.2025
Gold continues to trade with a positive tone at the start of the week, supported by expectations that the US Federal Reserve may cut interest rates at its December meeting. The metal stays firm during early European trading on Monday, helped by recent comments from several Fed officials that suggested a more dovish stance. As the US Dollar weakens to a two-week low, the non-yielding metal gains further support.
Uncertainty in broader markets and renewed geopolitical tensions from the Russia-Ukraine conflict are also encouraging investors to move toward safe-haven assets such as gold. Even so, buyers appear cautious as traders await key US data, beginning with the ISM Manufacturing PMI. This hesitation limits additional gains for now. From a technical point of view, a sustained move above the $4,250 zone would signal renewed bullish momentum. With daily chart indicators turning increasingly positive, gold could then look to break the $4,277–$4,278 barrier and potentially retest the $4,300 level.
On the downside, the Asian session low near $4,200 offers immediate support. Any decline below this area may attract fresh buying interest around $4,155–$4,153. A clean break beneath these levels could trigger technical selling and drive the metal toward $4,100 and then the $4,073 region, which aligns with the 200-period EMA and an ascending trend line from late October. Early Asian trading on Monday showed gold holding near $4,230 as traders looked ahead to the US ISM Manufacturing PMI for November.
Expectations of a rate cut remain a key driver. Recent soft US economic data and dovish remarks from Fed policymakers have strengthened the outlook for lower rates. According to the CME FedWatch Tool, markets now price in an 87% chance of a 25-basis-point cut at the December 9–10 meeting, up from 71% one week ago. Lower interest rates make gold more attractive by reducing the opportunity cost of holding a non-yielding asset.
The ISM Manufacturing PMI is expected to edge down slightly to 48.6 for November, compared with 48.7 in October. A stronger reading could temporarily lift the US Dollar and pressure gold in the near term. Meanwhile, signs of possible progress in peace discussions between the United States and Ukraine may reduce safe-haven demand. Reports over the weekend highlighted “very productive” meetings between US and Ukrainian officials, while President Trump’s envoy is scheduled to meet with Vladimir Putin in Moscow soon.
Gold gained more than 1% on Friday despite a quiet data calendar. With traders leaning toward further monetary easing in December, the metal broke above $4,200 for the first time in ten days. Fed officials have been quiet ahead of the blackout period, but recent comments from New York Fed President John Williams and Governor Christopher Waller supported a more dovish outlook. US data remains mixed—producer inflation appears to be cooling, while jobless claims show the labor market is still steady but gradually weakening.
Looking at the broader technical picture, gold has cleared $4,200 and appears ready to challenge the November 13 high at $4,245 and possibly $4,250. The RSI shows strengthening bullish momentum. If the price climbs above $4,300, the next major barrier is the record high at $4,381. If it falls below $4,200, support levels remain at the November 25 low of $4,109 and the 20-day SMA at $4,078.
Gold’s outlook remains constructive as traders prepare for next week’s busy US data schedule, which includes the ISM Manufacturing and Services PMIs, Industrial Production, ADP employment figures, and updated jobless claims. With expectations rising for a December rate cut, gold may continue to benefit from a softer US Dollar and lower yields. Investors looking for opportunities may consider building positions on dips above key support levels, especially if incoming data confirms slowing economic momentum. A break above $4,300 could open the door to further gains toward the all-time high, offering an attractive risk-reward setup for medium-term buyers.
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