Gold pulls back as markets react to Fed outlook and global risks

Gold (XAUUSD) retreats slightly as expectations for further Fed rate cuts, political uncertainty, and geopolitical risk continue to shape the outlook. Markets anticipate easier policy in 2026, which lowers the cost of holding gold. Questions around central bank independence have added to broader market caution. At the same time, unresolved war risks continue to support safe-haven demand. These forces keep gold well supported despite short-term consolidation.

Gold supported by Fed easing prospects, political risk, and geopolitical tensions

Gold’s long-term rally is underpinned by expectations that the US Federal Reserve will continue cutting interest rates in 2026. After three rate cuts this year, financial markets are now pricing in at least two more for the next year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it a more attractive store of value.

Meanwhile, political signals from the US have raised concerns over central bank independence. Former President Trump, a frontrunner for the upcoming election, recently suggested he would appoint a Fed Chair who favors low interest rates and supports his policy direction. This comment added to market uncertainty and boosted demand for hard assets like gold.

Geopolitical tensions remain a key driver for gold. Despite claims of progress in negotiations with Ukraine, no clarity has emerged on the main territorial challenges. The ongoing uncertainty continues to support gold’s role as a geopolitical hedge. Alongside softer labor data and thin year-end liquidity, the overall backdrop still favors safe-haven demand.

Gold holds bullish channel with $4,700–$4,900 resistance still ahead

The gold chart below shows a well-formed ascending channel that has guided the price since early October. Despite the recent dip, gold remains in a strong technical uptrend. The price bounced from the lower zone within the channel and rallied toward the upper range, reaching $4,550 before a brief pullback.

Overall, the structure reflects a well-defined bullish trend, marked by a consistent sequence of higher highs and higher lows. Price action remains firmly above the midline of the channel, which has provided reliable dynamic support throughout the rally. As long as the price holds within this formation, the broader uptrend is expected to continue.

The current consolidation near recent highs appears to be a pause rather than a reversal. The next resistance lies between $4,700 and $4,900, near the upper boundary of the channel. If gold maintains its strength above $4,400, the path toward this upper zone remains open. A decisive breakout beyond this region would open the door to further upside in early 2026.

Gold outlook: Strong fundamentals and technical setup support continued gains

Gold remains in a strong position despite short-term consolidation. Fundamental drivers like Fed rate cut expectations, political uncertainty, and geopolitical risk continue to support safe-haven demand. At the same time, the technical setup continues to support further upside. As long as price holds above key support, the broader uptrend is likely to continue into 2026.