Gold Price Slips Inside Key Retracement Zone as Fed Commentary Dents Rate Cut Bets
Spot gold (XAU/USD) edged lower early Friday, holding inside the $4133.95 to $4192.36 retracement zone as traders digested a fresh wave of hawkish Federal Reserve commentary. Thursday’s potential bearish closing price reversal top is weighing on sentiment, setting a cautious tone heading into the weekend.
The current downside bias remains in play unless bulls reclaim $4192.38. A break below $4133.95 would confirm the bearish chart pattern and could open the door to a pullback into the next retracement area at $4065.83 to $4023.35. Failure to hold this zone may expose the 50-day moving average at $3939.54.
At 12:04 GMT, XAUUSD is trading $4136.59, down $35.15 or -0.84%.
Fed Officials Push Back on December Rate Cut Expectations
Gold’s weakness was sparked by remarks from Boston Fed President Susan Collins, who said the bar for more easing remains high. Collins warned that additional rate cuts could undermine inflation progress, especially with labor market strength still intact and incoming data limited following the government shutdown.
San Francisco Fed President Mary Daly added fuel to the repricing, signaling a neutral stance and stating it’s too early to commit to a move in December. The combined messaging from Collins and Daly sharply reduced the odds of another cut this year.
According to CME Group’s FedWatch Tool, the probability of a December rate cut now stands at 49%, down from 64% earlier this week and as high as 95% just a month ago.
Shutdown Fallout Complicates Data Picture
Although the U.S. government reopened after a 43-day shutdown, the delay in key economic reports has left policymakers and markets flying blind. Some data, including October’s nonfarm payrolls and inflation readings, may never be released. Without that guidance, the Fed appears more inclined to pause rather than ease further.
Gold Price Forecast
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See all Gold forecastsGold also faced pressure from equity-related margin calls, as Thursday’s risk-off sentiment spilled into Friday’s session. Meanwhile, U.S. Treasury yields were mixed but generally firm, with the 10-year yield ticking up to 4.133%. The U.S. Dollar Index gained 0.13%, adding to gold’s headwinds as it approaches its pivot at 99.463.
Gold Price Forecast – Bias Turns Bearish Below $4133.95
The short-term outlook for gold leans bearish unless buyers can recapture $4192.38. A breakdown below $4133.95 could accelerate selling into $4065.83–$4023.35. With Fed officials pushing back against rate cut expectations and economic data still scarce, gold may struggle to regain upward momentum unless sentiment shifts or new downside inflation surprises emerge.
Traders will be watching for commentary from Fed members Schmid, Logan, and Bostic later Friday for additional clues on the policy path.
More Information in our Economic Calendar.
