On November 26, we noted that renewed market expectations for a Fed rate cut in December drove gold prices higher, with short-term technical indicators also signaling rebound potential. Key support levels were identified at $4,100 and $4,070, while resistance near $4,150 needed monitoring—a breakout above this level could target $4,200.
Tuesday's trading saw gold edge higher in Asian hours, peaking at $4,155 before facing consistent resistance near $4,150. European session dips found support at $4,109, with US hours briefly testing $4,159 before retreating to close flat as a doji candle. The rebound remained constrained by technical resistance and subdued holiday liquidity ahead of Thanksgiving.
Wolfinance star analysts observed that earlier government shutdowns delayed critical economic data, prompting Fed officials to adopt cautious rhetoric on December easing—slashing rate cut odds from 90% to below 40% within a month. This boosted the dollar to six-month highs, pressuring gold. Subsequent data releases, particularly the Fed Vice Chair's remarks highlighting labor market cooling and maintaining rate cut flexibility, reversed expectations—December easing probability surged from 40% to 70% in one day, reaching 81% this week. While dollar retreat supported gold's rebound, its upside was limited by tech-stock rallies diverting safe-haven demand, with muted volatility during holiday-thinned trading.
Technically, gold's mild rebound shows short-term bullish momentum. Key support clusters at $4,100 (aligned with 5/10-day MAs and last Friday's high), where holding could enable further upside. Resistance near $4,150 capped multiple tests on Tuesday despite brief spikes to $4,159. A decisive breakout may target $4,200 (near Bollinger Band upper boundary). Converging technical signals—5-day MA and MACD hooks upward, KDJ approaching golden cross, and RSI bullish crossover—all suggest rebound potential.
Trading strategy: Position for range-bound action amid reinforced December rate cut bets, with support at $4,100 and resistance at $4,150. Breakout confirmation could extend gains toward $4,200.
