Insights 
VT 
Gold maintained its firmness during the low-volume trading session on Thursday, coinciding with the US Thanksgiving holidays. XAU/USD was steady at $4,158. Bullion prices are consolidating due to limited updates, despite recent economic data hinting at a solid US jobs market and inflation possibly declining.
The likelihood of the Federal Reserve cutting rates by 0.25% stands at 85%, according to the CME FedWatch Tool. This outlook affects US Treasury yields, with the 10-year T-note yield dropping below 4%. However, peace talks between Russia and Ukraine could reduce Gold’s appeal as a safe haven.
Increased Tensions and Economic Indicators
Increased Japan-China tensions after support for Taiwan may boost Gold prices. US Initial Jobless Claims rose by 216K, below the forecasted 225K, indicating a solid labour market. Physical Gold exports from Hong Kong to China have dipped.
Gold trades around $4,160, with resistance levels at $4,200, $4,250, $4,300, and $4,381. A fall below $4,150 and $4,100 risks testing the 20-day SMA at $4,074 and $4,000. Gold serves as a safe-haven asset, hedge against inflation, and is held by central banks to stabilise economies.
Geopolitical instability and interest rates impact Gold prices. Gold’s relationship with the US Dollar also affects its pricing, with a weak Dollar potentially pushing prices up.
Strategies for Rate Cut Anticipation
With the market pricing in an 85% probability of a Federal Reserve rate cut in December, our focus should shift to bullish strategies for gold. This expectation is putting significant pressure on US Treasury yields, with the 10-year note already below 4%, creating a favorable environment for a non-yielding asset like gold. The primary trade signal for the coming weeks is positioning for this widely anticipated policy shift.
We should consider buying call options with strike prices at or above the $4,200 resistance level, possibly looking at January 2026 expirations to allow time for the trend to develop. The Relative Strength Index (RSI) is already indicating buyers are in control, suggesting momentum could build for a breakout. A move past $4,200 would open the door to challenge the next key levels at $4,250 and beyond.
This bullish outlook is reinforced by strong fundamental demand from central banks, which has been a consistent theme. Recent World Gold Council data from Q3 2025 showed global central banks added another 337 tonnes to their reserves, continuing the record-setting pace of accumulation we saw through 2023 and 2024. This institutional buying provides a strong underlying support for prices, limiting downside risk.
However, we need to manage the risks associated with potential safe-haven outflows. Any real progress in the Russia-Ukraine peace talks could quickly diminish gold’s appeal and trigger a sell-off. The still-resilient US labor market, with unemployment claims recently at their lowest since April, also presents a risk that the Fed could delay its easing plans.
Geopolitical tensions in Asia, specifically between Japan and China regarding Taiwan, are providing a counterbalance and supporting gold’s safe-haven status. These ongoing risks are likely to keep a floor under the price, even if a peace agreement in Europe materializes. This dynamic, combined with a dovish Fed, creates a compelling case for higher gold prices.
This market setup is very similar to what we observed in late 2023, when strong anticipation of rate cuts for 2024 sent gold on a significant rally from below $2,000. That historical pattern suggests that the period just before the first official rate cut is often the most profitable for long positions. The current consolidation around $4,160 appears to be a staging ground for a similar move upward.
