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Gold Surges Toward $4,100 as Fed Rate-Cut Bets Strengthen and Dollar Weakens
Traders' Opinions
Summary:
Gold prices jumped over 2% to around $4,080 on Monday, buoyed by rising expectations of another Federal Reserve rate cut in December and a softer US Dollar.
Buy
TradingXAUUSD
EXP
4079.86
Entry Price
4200.00
TP
4000.00
SL
4095.29 +94.39 +2.36%
0
Point
Flat
4000.00
SL
CLOSING
4079.86
Entry Price
4200.00
TP
Gold (XAU/USD) surged on Monday, climbing over 2% during the European session to trade near $4,080 per ounce, as investors ramped up bets that the Federal Reserve (Fed) will cut interest rates again in December. The rally marks the metal’s second major weekly gain in November and underscores renewed appetite for non-yielding assets amid a shifting US monetary outlook and a softer US Dollar.
Market sentiment has turned increasingly dovish, with traders pricing in a 64.6% probability of a 25-basis-point (bps) rate cut at the Fed’s December policy meeting, according to the CME FedWatch Tool. Should this materialize, it would mark the third consecutive rate reduction, signaling that policymakers remain focused on cushioning economic momentum amid signs of cooling inflation and moderate labor market conditions.
Lower interest rates typically boost the appeal of assets like gold that offer no yield, as they reduce the opportunity cost of holding them. The combination of easing Fed policy expectations and weakening Treasury yields has created a fertile backdrop for bullion, which is increasingly viewed as an attractive hedge against lingering macroeconomic uncertainty.
At the same time, the US Dollar Index (DXY)—which tracks the greenback’s value against a basket of six major currencies—remained subdued near 99.55, extending its recent decline. A weaker Dollar makes gold cheaper for overseas buyers, further enhancing demand. The dollar’s softness follows the US Senate’s approval of a stopgap funding bill to reopen federal agencies, temporarily averting a government shutdown. The development lifted investor sentiment and prompted a modest rotation away from the greenback toward riskier assets.
However, while improved market confidence has curbed some of gold’s safe-haven appeal, the broader narrative remains bullish. The metal continues to benefit from structural demand, particularly as central banks across emerging markets increase their gold reserves, and as investors look for protection against potential volatility in the bond and equity markets heading into year-end.
Technical Analysis
From a technical perspective, gold’s charts paint a compelling picture for further upside. On the daily chart, XAU/USD has confirmed a bottoming formation, with consecutive positive sessions reinforcing the probability of an extended recovery. The recent breakout above the Bollinger Middle Band further underscores growing bullish momentum, with the next major target seen around $4,300 if upward pressure persists.
Shorter-term analysis aligns with this view. The 4-hour chart shows an upward breakout, signaling renewed momentum after last week’s consolidation. A modest pullback toward the $4,050 zone is likely to act as the first layer of support, providing potential entry points for buyers seeking to capitalize on dips. If gold finds a firm footing at this level, renewed buying could propel prices back toward $4,095–$4,100, which remains the immediate resistance zone. A clear break above that range would open the path toward higher highs in the short term.
Conversely, failure to hold the $4,045–$4,050 support area could invite short-term profit-taking, but the broader uptrend remains intact as long as prices stay above $4,000. Traders are advised to follow the prevailing trend closely, maintain disciplined position sizing, and set strict stop-loss levels to manage volatility effectively.
TRADE RECOMMENDATION
BUY GOLD
ENTRY PRICE: 4080
STOP LOSS: 4000
TAKE PROFIT: 4200
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