Gold prices slipped again on Monday. XAU/USD just couldn’t hold onto its brief jump above $4,100 during Asia’s session. Now we’re looking at three days in a row of losses, mainly because traders aren’t betting on a December Fed rate cut anymore. Fed officials keep throwing cold water on the idea of aggressive easing, and that’s helping the US dollar flex its muscles again—which, honestly, isn’t great for gold since it doesn’t pay yield.
Stronger Dollar Weighs on Gold
The dollar’s climb is really what’s pinning gold down. Kansas City Fed President Jeffrey Schmid just reminded everyone that inflation’s still hanging around and rates need to stay high for now. Odds of a December rate cut dropped below 50%, so gold took a hit last week and just kept sliding into Monday.
Everyone’s waiting to see what happens next, though. The Fed’s meeting minutes come out Wednesday (a bit late), and Nonfarm Payrolls drop on Thursday. Both could shake things up for the dollar and set the next move for gold.
Economic Worries Keep Gold From Crashing
Even with the dollar on the upswing, gold isn’t falling off a cliff. Why? People are nervous about the US economy cooling down, especially after that record-long government shutdown. There’s still hope the Fed will have to cut rates later on, and a jittery market mood is keeping gold from slipping below Friday’s low around $4,032.
According to chart analysis, optimistic traders must push gold prices above $4,100 in order to open the door to $4,145, or possibly even $4,200. However, gold may challenge support at $4,032 if it falls below the 200-period SMA around $4,059. A more profound slide? That brings $4,000 and possibly $3,900 within reach.
