Gold News: Price Holds Key Support as 87% Fed Cut Odds Fuel Bullish Setup

Gold Holds Above Key Support as Markets Wait for Fed Clues

Spot Gold (XAUUSD) is grinding higher Tuesday, trading just above the short-term retracement zone between $4,133.95 and $4,192.36. That’s the final line of defense before the 50-day moving average at $4,058.26 — and as long as that holds, the uptrend’s still in play.

The two-day consolidation tells you what you need to know: traders are positioned, but nobody’s pressing. They’re waiting for the catalyst that breaks this week’s high at $4,264.70. After that, it’s a straight shot at the record at $4,381.44.

The setup is clean. Buyers have been stepping in on dips all year, and right now they’re deciding whether to chase the breakout or wait for one more pullback. With the 50-day still rising, the bias is to buy weakness — but the real move likely comes from the data, not the chart.

At 12:27 GMT, XAUUSD is trading $4207.87, up $2.20 or +0.05%.

Fed Cut Odds Jump, Treasury Yields Drift Lower

Markets are pricing an 87% chance of a December rate cut, up sharply from 30% just two weeks ago. That shift — driven by weaker jobs data and dovish comments from Fed Governor Christopher Waller — is doing the heavy lifting for gold right now.

Treasury yields are edging lower across the curve. The 10-year is down to 4.063%, the 2-year at 3.49%. Not a collapse, but enough to keep non-yielding assets like gold supported. Lower rates mean lower opportunity cost, and that’s been the theme all year.

The question now is whether this week’s data — ADP employment Wednesday, ISM Services later, and the delayed September PCE on Friday — confirms the Fed’s dovish tilt or throws a wrench in it. If the numbers come in soft, gold could punch through resistance. If they surprise hot, the dip-buyers get their chance.

Dollar Slides for Ninth Straight Session

The dollar’s on pace for its ninth consecutive daily loss, down 0.15% to 99.10 on the index. That’s a nearly 9% drop for the year, and it’s all about rate expectations. The more the Fed cuts, the less reason there is to hold dollars — especially when the euro’s catching a bid on hopes of a Ukraine peace deal and the yen’s firming on Bank of Japan rate hike talk.

Fed Chair uncertainty isn’t helping. Trump’s expected to announce his pick for Jerome Powell’s replacement early next year, and the market’s already pricing in a “shadow Fed chair” problem — two voices on policy when traders need one. That kind of noise usually weakens the dollar, and it’s another tailwind for gold.

Gold Poised for Breakout — But Waiting on the Data

Gold’s holding support, the Fed’s dovish, and the dollar’s weak. The setup favors the bulls, but the breakout isn’t confirmed yet. This week’s data will either push gold through $4,264.70 toward the record — or give dip-buyers one more entry before year-end. Either way, the 50-day moving average is the line that matters. As long as that holds, buyers have the upper hand.

More Information in our Economic Calendar.