Gold rebounds above $4,000 as strong US data limits rate-cut odds

Gold (XAUUSD) has regained ground above $4,000 as markets reassess the path of monetary policy. October’s stronger-than-expected jobs and services data have reduced the odds of near-term rate cuts, limiting further upside for now. Despite this shift in expectations, gold remains supported by its strong technical foundation. Meanwhile, equities have also bounced, while macro catalysts have paused, leaving gold in a temporary holding pattern. Market participants now await a clear policy signal or geopolitical development to revive directional momentum.

Gold maintains strength despite strong US data and equity rebound

Gold has bounced back, even as stronger U.S. economic data challenges the case for immediate policy easing. October’s private payrolls rose by 42,000, beating expectations and pointing to continued labour market strength. Meanwhile, the ISM Services PMI climbed to 52.4, driven by a firm rise in new orders. The stronger data has reduced the likelihood of near-term rate cuts, creating headwinds for gold, though the metal remains firm.

Additionally, shifting rate expectations have begun to weigh on gold’s near-term momentum. The probability of a December rate cut dropped from 69% to 62%, according to the CME FedWatch Tool. The shift has reduced bullish momentum, as gold typically strengthens when rate-cut expectations rise. However, the recent rebound signals underlying strength, supported by a firm technical structure and ongoing macro uncertainty.

Gold has staged a recovery, but renewed strength in equities, particularly in Asia, has capped additional gains. The metal maintains its upward bias as investors seek fresh direction amid ongoing policy uncertainty and limited economic data. Attention now turns to the next policy signal or geopolitical catalyst that could determine the sustainability of gold’s rebound.

Gold breaks above decade-long resistance, entering new bull market phase

The gold chart below shows a decisive breakout above a multi-year resistance line that capped advances since 2011. This breakout occurred in early 2024, following a well-formed rounding bottom pattern. By surpassing a key resistance zone that limited progress for over a decade, gold confirmed a major structural shift in its long-term trend.

Additionally, a structural support line that has climbed steadily since the early 2000s lies beneath the breakout. It connects major lows from past bull cycles and has consistently provided structural support during periods of consolidation. This rising base and the breakout above long-term resistance mark a clear shift into the next phase of gold’s broader bull market.

Moreover, the price has entered an accelerated phase, with each upward move gaining momentum. Each leg of the move is steeper, suggesting increased institutional participation and long-term capital flows into gold. The red arrow on the chart highlights a potential continuation toward the $4,400–$5,000 range, assuming the structure holds. However, the current correction has brought the price back into a consolidation zone, where it is digesting gains and waiting for fresh catalysts.

Gold outlook: Rebound holds, but next catalyst will be key

Gold has rebounded following a sharp rise and brief correction, holding firm despite shifting rate expectations. Strong U.S. economic data has reduced the likelihood of near-term rate cuts, tempering immediate upside. However, long-term fundamentals remain supportive, and technical structures continue to favour a broader bullish trend. For now, the market is looking for a clear catalyst, such as a policy shift or geopolitical event, to extend the rally further.

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