Insights 
VT 
Key Points
- Spot gold fell 0.3% to $4,055.73 per ounce.
- Dollar index (USDX) near six-month highs above 100, capping bullion gains.
- Fed rate cut odds eased to 69%, down from 74% a day earlier.
Gold prices continued to weaken at the start of the week as the US dollar’s strength made the metal more expensive for foreign traders. The dollarindex climbed above the key 100 mark, its highest level since May, following hawkish comments from the Federal Reserve.
Bullion, which typically moves inversely to the dollar, has struggled to find footing as traders dial back bets on an imminent rate cut. Markets are now pricing a 69% probability of a 25 bps reduction in December, compared with 74% just a day earlier, according to the CME FedWatch Tool.
Fed’s Mixed Messaging Keeps Bulls on the Sidelines
While New York Fed President John Williams hinted last week that there may be room for easing “in the near term,” several of his colleagues struck a more cautious tone.
Dallas Fed President Lorie Logan urged patience, while Cleveland’s Loretta Mester and Chicago’s Austan Goolsbee warned that cutting too quickly could reignite inflationary pressures.
The conflicting signals have left gold traders in a holding pattern. With yields still elevated and safe-haven demand muted, traders are reluctant to push prices higher without a fresh catalyst.
Technical Analysis
Gold has eased off its peak near 4,381 after a sharp multi-month climb, and the chart now shows a period of consolidation just above the 4,000 level.
The moving averages remain in a bullish alignment overall, but the short-term lines have flattened, reflecting a slowdown in momentum after October’s surge.
This cooling phase looks healthy rather than corrective for now, as price continues to hold above the rising 30-day average, which has acted as trend support since late August.
The MACD, however, signals a loss of upside steam. The indicator has crossed below the signal line and dipped back toward neutral territory, suggesting buyers are stepping back after the strong run.
If gold holds above 4,000 to 3,950, the broader uptrend remains intact and could resume once momentum rebuilds.
A break below that support cluster would open the door to a deeper pullback toward the 3,700–3,800 zone.
Upside continuation would require a clean move back above 4,200, which would show that demand is returning in force.
Cautious Outlook
With the US dollar holding strong and Fed officials leaning hawkish, gold’s upside appears capped in the near term. However, medium-term fundamentals remain supportive: central bank buying, de-dollarisation trends, and lingering fiscal uncertainty continue to underpin long-term demand.
Until rate expectations shift meaningfully, traders are likely to treat rallies as selling opportunities rather than the start of a new bullish leg.
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