A weaker dollar supported gold prices as they fluctuated higher, awaiting a pressure test.
2025-11-26 10:37:37
Gold (XAU/USD) continued its rebound during Wednesday's Asian trading session, approaching the key level of $4,160 per ounce again. This rise followed Tuesday's sharp two-way market volatility and was mainly driven by weak US macroeconomic data and a further dovish stance from the Federal Reserve.
Data released on Tuesday showed that the U.S. Producer Price Index (PPI) rose 2.7% year-on-year in September, slightly higher than the previous value but largely in line with expectations; while the core PPI, excluding food and energy, rose 2.9% year-on-year, exceeding expectations.
However, the more influential retail sales data was weak – rising only 0.2% in September, far below market expectations of 0.4%, and significantly slower than the 0.6% increase in August. Meanwhile, the consumer confidence index fell to a seven-month low in November, highlighting that a weak labor market is dragging down the consumer outlook.
Against this backdrop, several senior Federal Reserve officials have successively signaled a clear easing stance. John Williams, President of the New York Fed, stated that interest rates could be further lowered without jeopardizing the inflation target.
Governor Christopher Waller stated bluntly that the job market is "weak enough to support another 25 basis point rate cut in December"; Governor Stephen Milan went even further, calling for a "significant rate cut" to return to a neutral policy stance. The market reacted swiftly, with current pricing indicating an 85% probability of a rate cut in December.
The US dollar thus came under pressure, falling to a near one-week low, providing strong support for gold, a non-interest-bearing asset. Although progress in the Russia-Ukraine peace talks weakened some safe-haven buying and optimistic global risk asset sentiment limited gold's upside potential, the overall macroeconomic environment remains clearly favorable for precious metals.
Looking at the 4-hour chart, gold prices successfully held the key support area last week – an area formed by the intersection of the 200-period exponential moving average (EMA) and the upward trend line extending from late October, currently around $4,040.
Prices subsequently rebounded, and with daily and 4-hour oscillators (such as RSI and MACD) turning positive, the short-term bullish structure was strengthened. If gold prices can effectively break through the overnight high of $4,160, it will further confirm the upward momentum, with targets at the intermediate resistance of $4,180, and then challenge the psychological level of $4,200.
Once it holds above 4200, the next target will be the month's high of $4245.
On the downside, initial support lies in the $4,100 area; a break below this level could lead to a retest of the dense support zone around $4,050. If this area is decisively broken, gold prices could accelerate their decline towards the $4,000 level.
Editor's Note:
Gold prices are currently caught in a tug-of-war between "macroeconomic positives" and "rebounding risk appetite." While geopolitical easing and a recovery in risk assets have dampened traditional safe-haven inflows, the certainty of the Federal Reserve's shift towards easing is reshaping asset pricing logic.
With declining real interest rate expectations and a weakening dollar, gold has become significantly more attractive as a hedge against currency devaluation and policy uncertainty. In the short term, as long as the $4,030 support level holds, the bulls remain in control.
We should pay close attention to upcoming data releases such as durable goods orders, initial jobless claims, and the Chicago PMI, as well as speeches by FOMC members. These factors will determine whether gold prices can successfully break through $4,200 and begin a new upward trend.
Data released on Tuesday showed that the U.S. Producer Price Index (PPI) rose 2.7% year-on-year in September, slightly higher than the previous value but largely in line with expectations; while the core PPI, excluding food and energy, rose 2.9% year-on-year, exceeding expectations.
However, the more influential retail sales data was weak – rising only 0.2% in September, far below market expectations of 0.4%, and significantly slower than the 0.6% increase in August. Meanwhile, the consumer confidence index fell to a seven-month low in November, highlighting that a weak labor market is dragging down the consumer outlook.
Against this backdrop, several senior Federal Reserve officials have successively signaled a clear easing stance. John Williams, President of the New York Fed, stated that interest rates could be further lowered without jeopardizing the inflation target.
Governor Christopher Waller stated bluntly that the job market is "weak enough to support another 25 basis point rate cut in December"; Governor Stephen Milan went even further, calling for a "significant rate cut" to return to a neutral policy stance. The market reacted swiftly, with current pricing indicating an 85% probability of a rate cut in December.
The US dollar thus came under pressure, falling to a near one-week low, providing strong support for gold, a non-interest-bearing asset. Although progress in the Russia-Ukraine peace talks weakened some safe-haven buying and optimistic global risk asset sentiment limited gold's upside potential, the overall macroeconomic environment remains clearly favorable for precious metals.
Looking at the 4-hour chart, gold prices successfully held the key support area last week – an area formed by the intersection of the 200-period exponential moving average (EMA) and the upward trend line extending from late October, currently around $4,040.
Prices subsequently rebounded, and with daily and 4-hour oscillators (such as RSI and MACD) turning positive, the short-term bullish structure was strengthened. If gold prices can effectively break through the overnight high of $4,160, it will further confirm the upward momentum, with targets at the intermediate resistance of $4,180, and then challenge the psychological level of $4,200.
Once it holds above 4200, the next target will be the month's high of $4245.
On the downside, initial support lies in the $4,100 area; a break below this level could lead to a retest of the dense support zone around $4,050. If this area is decisively broken, gold prices could accelerate their decline towards the $4,000 level.
Editor's Note:
Gold prices are currently caught in a tug-of-war between "macroeconomic positives" and "rebounding risk appetite." While geopolitical easing and a recovery in risk assets have dampened traditional safe-haven inflows, the certainty of the Federal Reserve's shift towards easing is reshaping asset pricing logic.
With declining real interest rate expectations and a weakening dollar, gold has become significantly more attractive as a hedge against currency devaluation and policy uncertainty. In the short term, as long as the $4,030 support level holds, the bulls remain in control.
We should pay close attention to upcoming data releases such as durable goods orders, initial jobless claims, and the Chicago PMI, as well as speeches by FOMC members. These factors will determine whether gold prices can successfully break through $4,200 and begin a new upward trend.
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