Gold Falls Toward $4,075 as Dollar Surge Pressures Bulls Ahead of NFP
Gold eased lower on Monday, slipping toward the $4,075 mark as the stronger dollar kept buyers on the defensive...
Quick overview
- Gold prices fell towards $4,075 as a stronger dollar diminished its appeal for non-USD holders.
- Fading expectations of a December Fed rate cut have reduced gold's yield advantage, contributing to bearish sentiment.
- Traders are closely monitoring upcoming US labor market data, which could influence market dynamics.
- Technical indicators suggest a bearish outlook for gold, with key resistance levels established around $4,118–4,140.
Gold eased lower on Monday, slipping toward the $4,075 mark as the stronger dollar kept buyers on the defensive. With the DXY extending gains for a second session, the metal lost some of its appeal, especially for non-USD holders.
Analysts note that fading hopes of a December Fed rate cut are weighing on gold. KCM Trade analyst Tim Waterer said the market’s reduced rate-cut expectations have trimmed gold’s yield advantage, adding that policymakers’ hawkish tone isn’t helping sentiment.
Traders are watching a busy US data lineup this week, including Thursday’s nonfarm payrolls report, which could offer fresh insight into the labor market. The Commerce Department is still updating its release schedule following the government shutdown, adding another layer of uncertainty.
Fed Outlook Keeps Traders Cautious
Market pricing now reflects roughly a 46% chance of a quarter-point rate cut next month, down from 50% a week earlier. Fed officials have repeatedly highlighted lingering inflation and improving labor conditions as reasons to go slow on additional easing.
For gold, this matters. The metal tends to perform better when yields fall or policy turns dovish. With rate expectations softening but not collapsing, buyers are hesitating at higher levels even as broader macro uncertainty keeps the downside contained.
Gold Technical Outlook
Gold has broken below its rising channel from early November, signaling that bullish momentum has cooled. The sharp rejection from $4,244 created a shooting star and triggered a downward rotation confirmed by the 20-EMA crossover and weakening RSI, now below 40.
Price is holding above the $4,031 support for now, but the loss of the $4,118–4,140 region as support has turned it into resistance. Unless the market reclaims that zone, sellers may attempt another push lower toward $3,962.
Key factors to watch:
- Bearish divergence on RSI
- Channel breakdown
- 20-EMA acting as dynamic resistance
- Failed retest attempts near $4,118
Trade Setup
Gold remains bearish below $4,140. The cleaner setup is a short entry on a retest of $4,118–4,140, ideally confirmed by a bearish engulfing or shooting star candle. Stop-loss above $4,168. Take-profit targets: $4,031, then $3,962 if momentum extends.
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