Gold (XAU/USD) is down nearly 0.5%, trading close to $4,052 during Thursday’s European session. The metal comes under pressure as markets reduce expectations of a Federal Reserve rate cut at the December meeting.
According to the CME FedWatch Tool, the probability of a 25 bps rate cut to the 3.50%–3.75% range has fallen sharply to 32.8%, compared to 50.1% earlier in the week.
A scenario where the Fed keeps rates unchanged typically weighs on non-yielding assets like Gold.
Dovish bets faded on Wednesday after the release of the October FOMC meeting minutes, which signaled hesitation among policymakers about cutting rates in December.
The minutes noted that “most participants indicated that further rate cuts could raise the risk of inflation becoming entrenched or could be misread as a weakening of the Fed’s commitment to its 2% inflation target.”
Meanwhile, traders are preparing for heightened volatility ahead of the US Nonfarm Payrolls (NFP) report for October, due at 13:30 GMT. The employment data is expected to play a crucial role in shaping expectations for upcoming Fed policy decisions.
Gold Technical Outlook
Gold is hovering around the 20-day Exponential Moving Average (EMA) near $4,053, signaling a broadly sideways market.
The 14-day Relative Strength Index (RSI) remains range-bound between 40 and 60, reflecting uncertainty and lack of clear momentum.
On the downside, key support lies at the October 28 high around $3,888.62. On the upside, the all-time high near $4,380 continues to act as the major resistance level.
