Insights 
VT 
Key Points
- Gold trades near $4,200, supported by rate cut bets.
- Fed expected to deliver a 25bps cut; markets now see only two more cuts in 2026.
- China boosts gold reserves for the 13th consecutive month, totalling 74.12M ounces.
Gold prices held firm around $4,192 per ounce on Tuesday, remaining within striking distance of recent highs as markets priced in an 87% chance of a rate cut by the US Federal Reserve later this week.
Traders are now shifting focus from the cut itself to the forward guidance and updated dot plot, which will likely shape expectations well into 2026.
While a 25bps reduction has been widely telegraphed, there’s growing caution around how many additional cuts the Fed is willing to commit to.
Just last week, the market was pricing in three cuts for next year. That number has since eased to two, as resilience in labour and services data challenges the more aggressive easing case.
JOLTS, Powell, and Inflation Projections
Before the Fed speaks, attention turns to the JOLTS job openings report due later today. The data will offer another look into labour market tightness, which has so far supported the Fed’s higher-for-longer stance.
Combined with last week’s mixed signals from ADP’s drop of 32K and Challenger’s November layoffs climbing to 71K,the Fed now faces a more nuanced inflation–labour backdrop.
Chair Jerome Powell’s press conference will be closely parsed for clues on how the FOMC views the balance of risks moving forward. Any dovish lean could send gold toward retesting $4,381, the recent high from late October.
China’s Gold Appetite Grows
In a supportive fundamental backdrop, China’s central bank continued to diversify reserves, increasing gold holdings for the 13th straight month.
According to data from the People’s Bank of China, total reserves now stand at 74.12 million troy ounces, signalling ongoing strategic demand for bullion amid geopolitical and economic uncertainties.
Persistent buying from sovereign institutions adds a layer of support beneath the market, particularly as physical demand from India and the broader Asia region also holds firm.
Technical Analysis
Gold is trading near $4,191.96, holding steady in a tight consolidation band just below the key resistance at $4,220 and not far from its recent high at $4,381.32.
The price action over the past few weeks suggests a healthy pause after October’s strong rally, with buyers continuing to defend higher lows while waiting for a fresh catalyst to break out.
The moving averages (5, 10, and 30) remain bullishly aligned, with the 30-day MA providing dynamic support around $4,100.
The MACD, while still above the zero line, has flattened significantly; a sign that momentum is neutralising but not yet reversing. The histogram reflects this, showing minimal volatility and subdued conviction in either direction.
A clean break and daily close above $4,220 could pave the way for a fresh rally toward $4,300 and eventually $4,380–$4,400, while a drop below $4,100 would expose the lower range near $3,950–$4,000. For now, the trend remains bullish, but the market is coiling for a directional move.
Cautious Outlook
With the Fed’s policy statement looming, markets are unlikely to push gold significantly in either direction without further clarity.
A dovish dot plot and Powell’s reassurance on inflation control may rekindle momentum, while any hawkish undertones or reduced rate cut projections could cap gains near $4,200.
Still, macro tailwinds from central bank demand to softening US yields suggest gold’s broader bullish structure remains intact into early 2026.
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