Gold rises on dovish Fed bets and soft US economic indicators

Gold (XAUUSD) is gaining momentum as markets anticipate a Federal Reserve rate cut in December. Investors are positioning for the return of key economic data as the government edges closer to reopening. Soft labour figures and weak consumer data have increased expectations for policy easing. At the same time, signs of economic stress are becoming more visible. This backdrop is driving renewed demand for gold, which tends to benefit when interest rates fall.

Gold rises on Fed cut expectations and signs of US economic strain

Gold’s recent gains are underpinned by mounting expectations for Federal Reserve policy easing. Markets are preparing for the return of official data as the government nears a potential reopening. A December rate cut is now firmly on the table, with the CME FedWatch Tool showing a 64% probability. This renewed optimism is driving demand for gold, which benefits when interest rates fall.

At the same time, the U.S. economy is showing clearer signs of stress across consumer outlook and employment. The University of Michigan's Consumer Sentiment Index plunged to 50.3 in early November. This marked the lowest level in over three years and highlights persistent concerns about inflation, job security, and future income. Additionally, Challenger, Gray & Christmas reported a 183% jump in monthly layoffs, marking the worst October in more than two decades. These indicators suggest the economy is under growing stress.

Meanwhile, markets are closely monitoring the upcoming private-sector employment report for fresh signals on labour market conditions. Continued softness in job growth could strengthen expectations for a December rate cut. Gold remains highly responsive to interest rate outlooks, and further weakness in labour or inflation data may attract renewed inflows. As U.S. bond markets observe Veterans Day, investors are turning to economic releases and sentiment indicators to assess near-term direction.

Gold consolidates near resistance after strong series of breakouts

The gold chart below shows a well-defined bullish structure with a series of consolidations followed by clean breakouts. Every consolidation phase led to an upward breakout, creating a stair-step progression. This repeated breakout behaviour highlights strong trend momentum and steady buying interest.

From early 2024 through late 2025, gold experienced three major consolidation phases. These pauses allowed the market to absorb gains and rebuild momentum before each leg higher. Breakouts from each range led to increasingly sharp rallies. The most recent breakout near $3,400 triggered a strong move above $4,000, backed by rising volume and momentum. This advance confirmed strong bullish momentum and set the stage for further upside.

Gold is currently forming a narrow range just below key resistance, resembling earlier consolidation patterns that preceded strong breakouts. This developing structure suggests the market may be preparing for another upside move. Seasonal flows or macro catalysts could provide the trigger for the year-end. A breakout above $4,200 would confirm upside continuation and potentially launch the next leg higher.

Gold outlook: Macro stress and technical strength support upside

Gold remains well-supported as markets focus on potential rate cuts and new economic indicators. Weak labour reports, collapsing consumer sentiment, and elevated layoff figures continue to pressure the broader outlook. This combination of macro stress and rate cut expectations is fueling renewed interest in gold. Meanwhile, the technical setup points to another potential breakout, with price consolidating just below key resistance. If momentum continues, gold could accelerate further into the year-end.

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