FX.co ★ Sud | XAU/USD, GOLD

Gold prices (XAU/USD) rose by more than 1.50% on Monday, surpassing the $4,130-per-ounce mark, driven by a weakening US dollar. This gain occurred despite strong employment data released on Friday, which prompted a slight "hawkish" adjustment in expectations regarding Federal Reserve interest rate policy. A significant rebound in US equities reflects an overall increase in market risk appetite. This is partly due to comments from US President Donald Trump, who indicated that the likelihood of a new round of US military strikes against Iran is very low and that diplomatic negotiations continue to make progress. Consequently, the price of West Texas Intermediate (WTI) crude oil fell by nearly 6%, approaching $85.00 per barrel; given the positive correlation between crude oil and the US dollar, the decline in oil prices exerted significant downward pressure on the dollar. Geopolitical tensions further eased following news regarding the potential resumption of nuclear negotiations between the United States and Iran. According to the Al Arabiya news channel, Qatar and Pakistan have proposed a joint plan that would allow Tehran to limit its uranium enrichment levels to 3.67%. It is said that this framework was initially acknowledged by both Washington and Tehran. A weaker US Dollar Index (DXY)—down 0.46% against a basket of major currencies at 101.81—provided immediate support for gold prices, even as the yield on the benchmark 10-year US Treasury note rose by two basis points to 4.889%. The rise in Treasury yields reflects the market’s ongoing digestion of last Friday’s non-farm payrolls report, which significantly exceeded market expectations and saw the national unemployment rate fall from 4.2% to 4.1%. In light of a persistently strong labor market, the CME’s "FedWatch Tool" indicates that the market now assigns an 84% probability to a 25-basis-point interest rate hike by the Federal Reserve at its December meeting—up from 76% late last week. Although gold—which yields no interest—typically faces structural headwinds in a high-interest-rate environment, actual buying demand from global monetary authorities (central banks) has somewhat mitigated the downside risks for gold prices. Official data from the World Gold Council revealed that the People’s Bank of China increased its gold holdings by approximately 25.8 metric tons in October—the largest single-month increase in three years. Meanwhile, hawkish comments from Federal Reserve officials have heightened market caution regarding the medium-term trajectory of monetary policy. Richmond Federal Reserve President Thomas Barkin stated that there is no set baseline expectation for the December policy meeting, emphasizing that risk factors remain tilted primarily toward the "inflation" side of the Federal Reserve’s dual mandate. Meanwhile, Chicago Federal Reserve President Austan Goolsbee also signaled a hawkish stance, warning that accelerating inflation in the services sector has become a significant challenge, and noting that policymakers must confront the difficulties involved in returning inflation to target levels. Looking ahead, market participants are turning their focus to the U.S. Consumer Price Index (CPI) data due on Tuesday; the headline year-on-year CPI is expected to rise from 3.7% in October to 3.9%, while the core year-on-year CPI is projected to increase slightly from 2.6% to 2.8%. From a technical perspective, gold saw a positive start to trading this week, though spot prices remained capped below the high of $4,146 recorded last Thursday. Although price action has shown a short-term bullish recovery, momentum indicators suggest that a range-bound consolidation phase may lie ahead, with the 14-day Relative Strength Index (RSI) currently hovering around the neutral level of 50. To confirm a sustained bullish breakout, the spot price of gold (XAU/USD) must decisively clear the key resistance zone formed by the 100-day Simple Moving Average (SMA)—at $4,191—and the 50-day SMA—at $4,201. Achieving this would technically pave the way toward the psychological level of $4,300. Conversely, on the downside, bears would first need to push the price of gold back below $4,100, followed by a drop below the $4,000 support level. Should the price continue to fall below $4,000, it would point toward further support levels: first, the intraday low of $3,919 recorded on November 4, followed by the annual low of $3,879, set on October 30.