Gold (XAU/USD) continued its upward trend in Asian trading on Wednesday, rising to a seven-week high and breaking through the $4,300 mark. The core factors driving the price increase were primarily US labor market data and expectations regarding Federal Reserve policy.

Latest data shows that U.S. nonfarm payrolls increased by 64,000 in November, slightly higher than the market expectation of 50,000, while the October figure was revised down to -105,000. The unemployment rate rose to 4.6%, up from the previous value of 4.4%, and average hourly wages increased by 0.1% month-on-month, indicating a slowdown in wage growth.

Overall, the US labor market remains resilient, but its growth rate has slowed, which has strengthened market expectations that the Federal Reserve may cut interest rates further in 2026, thus providing support for gold.

The Federal Reserve cut interest rates for the third time last week, by 25 basis points, but officials remain divided on the future policy path. Some officials expect only one rate cut next year, while others believe no further cuts are necessary, and traders generally expect two rate cuts.

Meanwhile, the market will be watching speeches by Federal Reserve officials, especially New York Fed President John Williams and Atlanta Fed President Raphael Bostic. Any hawkish comments could boost the dollar and put short-term pressure on gold.

In addition, the release of US November CPI and PCE data will also be an important factor influencing expectations of a Federal Reserve rate cut. The pressure on the US dollar is another significant driver of gold's upward movement.

The US dollar is trending weaker in the short term due to divergent employment data and uncertainty about future policies, which reduces the opportunity cost of holding gold as a non-yielding asset and thus enhances its attractiveness.

Overall, gold continues its bullish trend supported by fundamentals, but short-term volatility and consolidation are possible.

From a technical perspective, gold prices show a continued bullish trend on both the daily and 4-hour charts. On the daily chart, gold is firmly above key moving averages, and the RSI is above 50, indicating bullish momentum. Resistance levels are at $4350 (the high of December 15th) and the historical high of $4381, while support levels are at $4270 and $4230.

The overall daily chart structure shows signs of consolidation at high levels after a strong upward move, with the trend still leaning towards bullish. The 4-hour chart, on the other hand, shows short-term oscillations, with the price stabilizing above the 100-day EMA. The Bollinger Bands widening indicates increased short-term volatility, and the RSI is hovering above the midline.

Short-term support and resistance levels are largely consistent with the daily chart, with the trading range around 4270–4350. A breakout above $4350 with consecutive positive candlesticks could trigger a new upward trend; conversely, a series of downward candlesticks should raise concerns about short-term downward pressure.

Overall, gold maintains its short-term bullish momentum, but technical indicators suggest it may be entering a period of consolidation at high levels, and the market needs time to digest the previous gains.


Editor's Note:

Gold's current price action indicates a period of consolidation after a strong upward move. A weakening dollar and expectations of a Fed rate cut remain the core drivers, with technical factors supporting further short-term gains. However, attention should be paid to the potential impact of Fed officials' speeches, CPI, and PCE data on market sentiment.