Gold Weekly Forecast: Gold prices may stay under pressure this week as buyers lose confidence. Investors are now unsure if the next US Federal Reserve rate cut will come soon. Check the latest gold trend, outlook, support–resistance levels, and what traders should watch ahead.
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Gold (XAU/USD) gained traction and climbed to its highest level since October 21, above $4,200, after having spent the previous week in a tight consolidation channel. Nevertheless, heightened doubts about the Federal Reserve’s potential rate cut in December caused XAU/USD to erase a portion of its gains heading into the weekend. With the United States (US) government shutdown coming to an end, investors await clarity on how the economic data backlog will be handled and what they will say about the state of the US economy.
Gold gathers bullish momentum as safe-haven flows dominate
Gold started the week on a bullish note as the improving risk mood made it difficult for the US Dollar (USD) to find demand. Over the weekend, a group of centrist Democrats negotiated a deal, paving the way for the US Senate to approve the temporary funding bill with a 60-40 vote and move one step closer to ending the government shutdown.
On Tuesday, Automatic Data Processing (ADP) reported that private employers shed an average of 11,250 jobs a week in the four weeks ending October 25. This data revived concerns over worsening labor market conditions and caused the USD to continue weakening. In turn, XAU/USD continued to stretch higher.
Late Wednesday, the House of Representatives approved the funding bill as anticipated. Shortly after, US President Donald Trump signed the bill, officially reopening the government. During a briefing with reporters on Wednesday, White House Press Secretary Karoline Leavitt said that the Bureau of Labor Statistics (BLS) might never release the employment and inflation data for October. These remarks caused the USD to come under renewed selling pressure and allowed XAU/USD to extend its rally to a fresh three-week high above $4,200.
On Thursday, the bearish action seen on Wall Street triggered a flight to safety and helped Gold hold its ground. However, hawkish comments from Federal Reserve (Fed) officials caused investors to scale back bets on a December rate cut by the central bank. As a result, Gold lost its bullish momentum and dropped below $4,100 on Friday after closing in negative territory on Thursday.
Fed Bank of St. Louis President Alberto Musalem said that he expects the labor market to stay around full employment and added that they need to proceed with caution now. Meanwhile, Minneapolis Fed President Neel Kashkari reiterated that inflation is still too high. According to the CME Group FedWatch Tool, the probability of a 25 basis points (bps) rate cut in December declined to nearly 50% from about 67% a week earlier.
❓ FAQs
1. Why is gold under pressure this week?
Because investors are unsure if the US Fed will cut interest rates soon, which reduces buying interest.
2. Will gold rise if the Fed confirms a rate cut?
Yes, a confirmed rate cut normally supports gold prices and can trigger bullish momentum.
3. Is this a good time to buy gold?
Only for long-term investors. Short-term traders should wait for clear signals.
4. What global factors should gold traders watch?
US inflation data, Fed commentary, geopolitical tensions, and dollar movement.
5. What is the short-term outlook for gold?
Trend looks weak to sideways until strong positive triggers appear.
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