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XAU/USD Rebounds on Fresh Fed Dovishness as Markets Boost December Cut Odds
Traders' Opinions
Summary:
Gold steadied on Friday after slipping earlier in the session, supported by renewed expectations of a near-term Fed rate cut following comments from New York Fed President John Williams.
Buy
CLOSEDXAUUSD
End Time
4059.93
Entry Price
4200.00
TP
4000.00
SL
4137.77 +3.22 +0.08%
7074
Points
Profit
4000.00
SL
4130.67
CLOSING
4059.93
Entry Price
4200.00
TP
Gold prices climbed off intraday lows on Friday, after a new round of dovish-leaning commentary from Federal Reserve officials revived hopes that the central bank could still move toward a rate cut before year-end. The shift added fresh volatility to a market that has spent the past week locked in a narrow but increasingly fragile range.
At the time of writing, spot Gold (XAU/USD) is trading near $4,067, recovering from a session low around $4,022, though the rebound remains tentative. Traders say the metal continues to lack a clear catalyst for a sustained upside break as macro uncertainty and shifting Fed expectations dominate market sentiment.
The turnaround in intraday momentum came after New York Fed President John Williams said he still sees scope for a potential rate cut “in the near term,” a remark that contrasted with the more cautious tone adopted by other policymakers in recent weeks. Williams’ comments breathed life back into rate-cut speculation at a moment when traders had been dialing back expectations for December.
Until Friday afternoon, the market had largely resigned itself to the idea that the Fed might hold rates steady well into Q1 2026, citing sticky inflation and still-resilient labour market data. Most policymakers have been consistent in warning that premature easing could risk undoing progress on inflation. However, Williams’ remarks sharply altered the tone, with December rate-cut odds jumping to nearly 70%, up from around 31% earlier in the day.
Lower interest rates typically benefit non-yielding assets such as gold by reducing the opportunity cost of holding them—fueling the quick repricing seen across metals markets.
Still, despite the rebound, Gold remains structurally vulnerable. The trading pattern throughout the week reflects hesitation from both sides of the market: buyers continue to defend support levels, yet bulls have failed repeatedly to muster the momentum needed to break through overhead resistance.
Technical Analysis
From a technical standpoint, Gold remains constrained within a broad symmetrical triangle structure that has shaped price action through November. Friday’s bounce came precisely from the ascending trendline near $4,040, a level that has repeatedly acted as a reliable support zone. I still see this area as a key pivot—lose it, and sentiment could deteriorate quickly.
The 4-hour chart shows XAU/USD trading below the 50-period Simple Moving Average, currently around $4,105, which has begun to roll over. That shift signals weakening bullish pressure, especially with the 50-SMA now sitting just above the mildly rising 100-SMA near $4,058. The alignment suggests the market lacks a clear directional bias and is waiting for a catalyst, but the tone is still skewed slightly toward sellers.
Momentum indicators echo that view. The Relative Strength Index (RSI 14) holds around 42, below the midpoint, reflecting subdued buying interest and reinforcing the idea that upside moves may be difficult to sustain.
If the ascending trendline breaks decisively—particularly on a closing basis—I expect a drop toward the $4,000 psychological level, followed by a deeper decline toward the October 28 swing low near $3,886.
On the upside, the $4,100–$4,200 zone remains a stubborn ceiling, repeatedly capping attempts from the bulls to build momentum. A clean break and daily close above $4,150 would be needed to signal a bullish shift and open the path toward higher extensions.
TRADE RECOMMENDATION
BUY GOLD
ENTRY PRICE: 4060
STOP LOSS: 4000
TAKE PROFIT: 4200
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