Bernstein says Donald Trump wants this stock to go up
- Gold outlook stays firm amid central bank demand.
- US labour market data to take centre stage.
- Momentum keeps sellers on the sidelines.
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Gold’s setback was once again short-lived. The mid-week dip quickly reversed, despite the US dollar finding some support from stronger-than-expected US data. By Friday, bullion had settled just shy of $3,760 before pushing decisively through the $3,800 threshold in Monday’s early trade. Can it hold at these highs, or will we see some profit-taking now ahead of key US jobs data this week?
Easing of Fed Rate Cut Expectations Not a Big Deal
The slight trimming back of expectations for two additional Fed cuts this year has so far done little to dent the bullish narrative. Gold’s advance long pre-dates the Fed’s shift towards easier policy, and the outlook is underpinned by more structural forces. Last week’s PCE print came in line with forecasts and proved a non-event.
Instead, the metal remains buoyed by persistent central bank buying, concerns over the US debt burden, and the sticky nature of inflation. Those themes, alongside a healthy dose of speculative interest, are keeping the market well supported. That said, the week ahead could prove pivotal.
Should incoming data temper expectations of a December cut, the US dollar may find more meaningful support, potentially curbing gold’s momentum. Otherwise, if labour market data continues to point to a softening jobs market, then this should be bad news for the US dollar and good for gold.
Why Gold Has Been Rising
Gold’s rally in recent months has been nothing short of spectacular. The metal has surged 10% so far this month alone.
Central bank demand remains the bedrock. According to the World Gold Council, the vast majority of central banks intend to add to reserves this year, with none planning to sell despite record highs. With geopolitical tensions simmering in Europe, the Middle East, and in US–China relations, gold is increasingly regarded as a strategic hedge. Nearly three-quarters of central banks also expect the US dollar’s share of reserves to fall, with gold naturally stepping into the gap.
The weaker US dollar has been another powerful tailwind. Fed’s rate cuts and the broader de-dollarisation theme have both played a role. For non-US dollar buyers, gold has rarely looked more attractive. The Fed’s rate cuts, coupled with expectations of more to come, have lowered yields and boosted the appeal of non-interest-bearing assets like gold.
Added to this is the political tug-of-war between Washington and the Fed, which has sown doubt about policy independence. Investors have been quick to turn to gold as insurance against potential missteps.
US Jobs Data in Focus This Week
Attention now shifts to a busy run of US labour market releases. JOLTS job openings, ADP payrolls, ISM surveys and official non-farm payrolls will shape the near-term gold direction. With the US dollar easing back lower in the last couple of days, it will take another string of weaker figures to keep the greenback on the back foot. Anything stronger could see profit-taking in the US dollar short bets, indirectly weighing on gold.
Among these, JOLTS (Tuesday) and non-farm payrolls (Friday) stand out. Powell’s recent comments—that there is no “risk-free path” on rates—have left markets unsure of the Fed’s next move. If jobs data once again undershoots expectations, the case for further easing strengthens. Another downside surprise in NFP could be the catalyst for fresh gains in gold.
Gold Technical Analysis and Levels to Watch
The overnight crossing above $3,800 was another notable psychological breakthrough for gold. The key question now is whether it can hold above this level and head towards $3,900 or even $4,000 level in the coming days and weeks. Support levels are now layered at $3,790, $3,783, $3,760, and then $3,700. With gold at uncharted territory, resistance levels are harder to pin down beyond round handles and Fibonacci extensions—likely spots for profit-taking.
Technically, momentum is stretched, with RSI readings deeply overbought across time frames. Yet rather than flashing an immediate sell signal, this highlights the strength of the trend. Therefore, until price action carves out a clear reversal pattern, dip-buying remains the prevailing strategy.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.