Gold Slips Below $4,230 as Stronger Equities Curb Safe-Haven Demand
Gold struggled to hold early gains on Tuesday, slipping below $4,230 as global equity markets opened stronger...
Quick overview
- Gold prices fell below $4,230 as global equity markets opened stronger, reducing demand for defensive assets.
- Traders are anticipating a Federal Reserve rate cut by year-end, providing some support for gold despite early pressure.
- Recent US economic data shows signs of slowing momentum, with the ISM Manufacturing PMI indicating continued contraction.
- Gold is currently consolidating, testing key support levels while maintaining a broader constructive structure.
Gold struggled to hold early gains on Tuesday, slipping below $4,230 as global equity markets opened stronger. Asian stocks rebounded after Monday’s selloff, reducing immediate demand for defensive assets. The upbeat tone in equities kept gold on the back foot, although sellers remained cautious ahead of key US data.
Despite the early pressure, the downside stayed limited. Traders continue to price in another Federal Reserve rate cut before year-end, offering a layer of support as policy expectations shift. Cooling US figures also kept dollar bulls defensive, preventing a deeper slide in XAU/USD.
Soft US Data Reinforces Dovish Fed Outlook
Fresh economic data added to the narrative of slowing US momentum. The ISM Manufacturing PMI fell to 48.2, down from 48.7, marking the ninth straight month of contraction. The reading came in below expectations and underscored weak industrial activity heading into year-end.
With the economy showing signs of fatigue, markets now assign an 87% probability of a December rate cut, according to CME FedWatch. A softer dollar helped stabilize gold after the initial dip, balancing the impact of stronger equities.
Geopolitical discussions in Europe also played a subtle role. While not triggering strong safe-haven flows, policymakers’ ongoing negotiations kept a layer of uncertainty alive, limiting aggressive selling in precious metals.
Gold (XAU/USD) Technical Outlook
Gold is consolidating after rejecting the $4,257 resistance, leaving a cluster of small bearish candles that signals hesitation from buyers. Price is now testing the 20-EMA at $4,201, which serves as the first intraday support. A clean close below this level would expose the next structural zone around $4,130.
The broader structure, however, remains constructive. Gold continues to produce higher lows, and the ascending trendline from the November base is still intact. The RSI has slipped to 49, forming a mild bearish divergence against last week’s high. Long upper wicks near resistance hint at supply, but no firm bearish reversal—such as Three Black Crows—has emerged.
Price remains capped by a long-term descending trendline from October’s peak at $4,382, forming a broad triangle that keeps the market in a controlled consolidation.
Gold (XAU/USD) Potential Trade Setup
A patient bullish bias remains intact as long as gold respects the rising trendline. Traders may look for:
- A rebound from the $4,130–$4,071 support area
- A bullish engulfing candle
- RSI turning upward from current neutral levels
A more conservative entry sits above $4,257, which would signal renewed upside momentum toward the broader triangle ceiling.
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