Gold rose more than 2% during a holiday-shortened week in the United States. This increase was fueled by growing expectations that the Federal Reserve will cut interest rates in December. The technical outlook for the metal appears bullish in the short term.
Gold gained momentum early in the week as traders reassessed the likelihood of a rate cut. Comments from Federal Reserve officials supported this view. Fed Governor Stephen Miran indicated he would support a smaller cut. New York Fed President John Williams also signaled openness to easing monetary policy soon.
Economic data released during the week had little impact on these expectations. Private payroll data from ADP showed job losses. Meanwhile, reports on durable goods orders were slightly better than expected. Gold held firm above $4,100 an ounce ahead of the Thanksgiving holiday, with trading activity thinning out on Friday.
With the Federal Reserve now in a quiet period ahead of its next meeting, investor focus will shift entirely to incoming US economic data. According to the CME FedWatch Tool, markets are currently pricing in an 85% probability of a 25-basis-point rate cut in December.
Key reports in the coming week will be crucial for gauging the Fed’s next move. The ISM Manufacturing PMI will be released on Monday. A strong employment component in this report could strengthen the US dollar and put pressure on gold prices. Investors will also watch the Challenger Job Cuts report on Thursday for signs of easing in the labor market.
From a technical perspective, the short-term outlook for gold remains positive. On the daily chart, the price is trading comfortably above its 20-day Simple Moving Average. This indicates underlying strength, although momentum has not accelerated further in recent sessions.
