Safe-Haven Demand Lifts Gold to Fresh Multi-Week High
Gold began the month on strong footing, rising to its highest level since late October as a wave of risk aversion boosted demand for safe-haven assets. At around $4,260 per ounce, XAU/USD is on pace for its best annual performance since 1979, climbing nearly 60% year to date. Support has come from sustained central bank buying, steady ETF inflows, geopolitical tensions and growing conviction that the Federal Reserve will lower interest rates at its December 9–10 meeting.
Markets now await a series of key US economic releases that could influence expectations for policy easing. Traders currently assign an 87% probability to a 25 basis point rate cut next week, encouraged by softer economic data and dovish remarks from Fed officials.
Fed Outlook Weakens the Dollar and Supports Precious Metals
The prospect of lower US interest rates has weighed on the US Dollar, with the Dollar Index trading near 99.09, a two-week low. A weaker currency makes gold more affordable for international buyers. Meanwhile, global equity markets slipped as investors turned cautious ahead of upcoming data and the Fed meeting.
Asian markets reflected a similar tone. Japanese equities retreated after hawkish comments from Bank of Japan Governor Kazuo Ueda, while China’s RatingDog Manufacturing PMI dipped to 49.9, its lowest level since July. A cryptocurrency selloff added to the broader risk-off environment.
Political and Geopolitical Developments Add to Market Sensitivity
Investors are also monitoring potential changes at the Federal Reserve after President Donald Trump indicated he would soon announce his choice for Fed chair. Reports suggest Kevin Hassett has emerged as the leading candidate, reinforcing expectations of a more dovish monetary approach.
On the geopolitical front, attention remains on Russia–Ukraine talks following four hours of negotiations in Florida. US and Ukrainian representatives described the discussions as “difficult but productive,” with US envoy Steve Witkoff expected to continue talks in Moscow this week.
Key Economic Data Ahead for US Markets
The US economic calendar includes the ISM Manufacturing PMI, which is projected to remain in contraction territory at 48.6. Later in the week, the PCE inflation report — a key metric for the Fed — will offer further clarity on the central bank’s policy path.
Technical Picture: Bullish Structure Intact for XAU/USD
Gold remains comfortably positioned above a recently broken symmetrical triangle on the 4-hour chart, reinforcing its bullish continuation pattern. Momentum indicators show strength, though the RSI near 77 signals an overbought environment that could temporarily limit follow-through.
The metal continues to consolidate within a supply zone between $4,250 and $4,270. A decisive break above this range would open the move toward the all-time high near $4,381. Initial support sits at the 21-period SMA around $4,187, followed by the upper boundary of the former triangle structure.
