Gold traded above the $4,000 psychological level near a weekly high in early European hours as a softer US Dollar and lower US bond yields supported demand for the metal. Democrats’ wins in the House and Senate increased the probability of legislative gridlock, while political uncertainty fed safe-haven positioning. Geopolitical risk also stayed elevated despite diplomatic efforts over the eight-month US-Iran war: the US indicated no immediate strike plans, Iran linked any reopening of the Strait of Hormuz to sanctions relief and an end to the naval blockade, and the IRGC said four tankers were destroyed by mines south of the strait.
Monetary Policy and Economic Data Weigh on Gold
Rate-hike pricing, however, kept gold’s upside constrained, with the CME Group FedWatch Tool pointing to a nearly 80% probability of a December increase. JOLTS showed job openings rising to 7.523 million in September from an upwardly revised 7.190 million in August, reinforcing expectations for tighter policy and leaving bullion capped below the $3,970 resistance zone. Technically, XAU/USD remained bearish below the 100-period SMA, with the 23.6% retracement at $3,947 overhead; RSI sat at 48.94 and MACD at 6.65. A break above $3,970 targets $3,995, $4,033, $4,057, $4,072, $4,127 and $4,197, while support is seen near $3,869, as traders await ADP, ISM Services PMI and Friday’s NFP.
