Gold is trading in a tight, indecisive range around the US$4,200 level, with the market showing all the hallmarks of a classic consolidation phase. After a strong multi-month run, a pause like this isn’t surprising and it doesn’t disrupt the broader bullish momentum underneath the surface.
A softer US Dollar continues to provide support, with the Dollar Index (DXY) slipping to new multi-week lows near 98.80–98.70. That normally acts as a tailwind for gold, but rising US Treasury yields and a generally positive tone across global equities are keeping the yellow metal from breaking meaningfully higher for now.
Investors are now shifting their attention to two key releases:
· US PCE inflation (the Federal Reserve’s preferred gauge), and
· University of Michigan consumer sentiment data.
Neither is expected to derail current market expectations. The Fed is still widely anticipated to deliver more easing at the December 10 meeting, and that alone reinforces the “buy-the-dip” mentality we’ve seen repeatedly throughout 2025.
This week’s Initial Jobless Claims came in better than expected at 191K, but markets brushed it off, it doesn’t meaningfully change the rate-cut outlook.
Despite a few short-term speed bumps, gold has now posted four straight monthly gains, recovering confidently from the late-August pullback toward US$3,300. Geopolitical risks remain very much in play, and the market continues to price in around 85bps of rate cuts through late-2026. That’s a supportive backdrop for a non-yielding asset like gold.
Could that shift? Certainly, if global risk appetite suddenly surges or geopolitical tensions fade meaningfully. But so far, every wobble in sentiment has been met with fresh buying. Underlying demand remains strong.
The tone for gold over the next few sessions will be set by:
· How the Fed frames the path to cuts,
· Whether economic data softens further, and
· Whether the US Dollar can find any real momentum.
Right now, the USD is struggling to do so, keeping an upward bias in place for gold.
This isn’t a runaway breakout environment, but rather a slow-and-steady climb. In that kind of landscape, pullbacks tend to look more like opportunities than warning signs.
Gold still enjoys a favourable macro backdrop.
· Dips continue to be bought.
· Rate expectations remain supportive.
· Safe-haven demand persists, even without new geopolitical shocks.
· The US Dollar is still under pressure.
Unless sentiment shifts sharply, the path of least resistance remains higher. Consolidation at these levels appears healthy, not a loss of momentum.
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