Gold Price Forecast: Traders Eye $4,142 Breakout as Fed and Jobs Data Loom
Gold holds near $4,000 as traders await Fed signals and U.S. data. A breakout above $4,142 could spark gains toward $4,250 amid shifting...
Quick overview
- Gold prices remained stable around $4,014, influenced by a stronger U.S. dollar and reduced expectations for further Federal Reserve rate cuts.
- The probability of a December rate cut has decreased to 71% following Chair Jerome Powell's cautious remarks, impacting gold's appeal as a non-yielding asset.
- Easing U.S.-China trade tensions have diminished safe-haven demand for gold, as investors shift focus to equities.
- Technical analysis indicates that gold is consolidating around the $4,000 level, with potential targets of $4,247 and $4,379 if it breaks above $4,142.
GOLD prices hovered around $4,014 on Monday, staying relatively flat as a stronger U.S. dollar limited upside momentum. Investors have trimmed expectations for another Federal Reserve rate cut in 2025, following the central bank’s latest 25 basis-point reduction on October 29. Chair Jerome Powell’s hawkish tone suggested policymakers may pause before considering further easing.
According to CME’s FedWatch Tool, the probability of a December rate cut now stands at 71%, down from over 90% before Powell’s remarks. Gold, a non-yielding asset, typically benefits from lower interest rates—but with policymakers signaling caution, traders are re-evaluating short-term prospects.
Adding to the pressure, easing U.S.-China trade tensions reduced safe-haven demand. President Donald Trump recently agreed to scale back tariffs in exchange for concessions from Beijing on fentanyl exports, soybean purchases, and rare earths trade—moves seen as boosting global risk appetite.
Key Economic Events Ahead
This week’s focus shifts to U.S. economic indicators that could reshape the Fed’s tone.
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ADP employment data and ISM manufacturing and services PMIs are due, offering insight into labor market resilience and business activity.
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Any downside surprises could reignite expectations for further easing, potentially lifting gold back toward its recent highs.
Market analyst Kelvin Wong noted that “safe-haven play has been reduced for now,” as investors rotate into equities amid improving trade sentiment.
Gold Technical Analysis: $4,142 in Focus
From a technical perspective, gold continues to consolidate around the $4,000 level, holding within an ascending channel on the 4-hour chart.
The metal remains supported by an uptrend line drawn from the October low near $3,796, forming a pattern of higher lows—a structure that often precedes bullish continuation.
The RSI near 51 suggests neutral momentum but shows early signs of recovery as it edges above the signal line. Meanwhile, the 20-period EMA is flattening just overhead, signaling short-term indecision before a potential breakout.
If gold clears $4,142 with conviction, traders may target $4,247 and $4,379. A drop below $3,980, however, could invalidate the bullish structure and expose supports at $3,886 and $3,796.
For now, the buy-on-dips strategy remains favorable, with traders positioning for a possible upside breakout as global macro data and Fed commentary shape gold’s next major move.
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