Gold Rockets Past $3,900 as Rate-Cut Hopes & Turmoil Drive Rally
Gold pushed above $3,900 an ounce in early Asian trade on Monday, building on last week’s momentum. Investor caution is growing...
Quick overview
- Gold surpassed $3,900 an ounce, driven by geopolitical tensions and US fiscal uncertainty.
- Investor focus is on upcoming economic data and the Fed's stance on rate cuts, which could influence gold's trajectory.
- Key data releases this week include Non-Farm Payrolls and Unemployment Claims, which are critical for assessing the labor market and inflation.
- Gold's ability to maintain its value above $3,900 will depend on the economic indicators and the Fed's tone in the coming days.
Gold pushed above $3,900 an ounce in early Asian trade on Monday, building on last week’s momentum. Investor caution is growing as geopolitical tensions and US fiscal uncertainty drive demand for safe-haven assets. Traders also think the Fed will cut rates after recent signs of cooling inflation and a softer labour market.
The metal is at a crucial point. With the US government still facing funding issues and global markets volatile, gold’s store of value appeal remains intact. Investors will be watching this week’s packed economic calendar for clues on the Fed’s next move and if gold can reach the psychological $4,000 mark.
Fed Minutes, Jobs Data
Market focus turns to Wednesday’s FOMC Meeting Minutes which will give insight into how policymakers view inflation persistence and the timing of rate cuts. The document will influence near term sentiment as traders look for evidence the Fed is getting closer to an easing cycle.
On Thursday, attention shifts to US Unemployment Claims expected to rise to 225,000 from 218,000. Later that day Fed Chair Jerome Powell speaks and any dovish comments will add to gold’s momentum.
Friday is the big day for traders with a bunch of high impact data releases:
- Non-Farm Payrolls (52K) – labour market to slow
- Average Hourly Earnings (0.3%) – key inflation gauge
- Unemployment Rate (4.3%) – steady but under scrutiny
The University of Michigan’s Consumer Sentiment (54.6) and Inflation Expectations (4.7%) will also give insight into household confidence and inflation psychology – both important for the Fed’s tone heading into year-end.
Technical Outlook: Can Gold Hold $3,900?
Gold is in a strong uptrend and both the 50-SMA ($3,865) and 100-SMA ($3,755) are rising – bullish. The RSI at 78 is overbought short term so gold may consolidate before another leg higher.A pullback to $3,905-$3,925 would be a healthy test of support, a break above $3,950 could take us to $4,000. But a close below $3,865 would break the structure and trigger profit taking.
Gold’s next move depends on this week’s data and Fed tone. If the numbers come in showing a slowing economy and dovish Fed, gold will consolidate above $3,900 and head for new highs.
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