Gold Gains Amid Dovish Fed Outlook, Weak USD Support by Amit Gupta, Kedia Advisory
Gold regained positive momentum following a late rebound from the $4,164 support area, moving closer to its highest levels since October 21. The yellow metal benefited from expectations of a US Federal Reserve rate cut, which kept the US Dollar subdued. Geopolitical tensions, including the Russia-Ukraine conflict, further supported safe-haven demand. Traders are awaiting key US macro data, including the ADP employment report, ISM Services PMI, and PCE Price Index, which may influence further gains. Technical levels suggest Gold needs acceptance above $4,245-$4,250 to strengthen bullish momentum, while $4,150-$4,180 offers key support.
Key Highlights:
* Gold rebounds from $4,164, nearing October highs.
* Fed rate cut bets keep USD weak.
* Geopolitical risks support safe-haven demand.
* Traders await ADP, ISM, and PCE data for direction.
* $4250 crucial for further bullish momentum.
Gold extended its recent gains after rebounding from the $4,164 support area, moving closer to levels last seen on October 21. The commodity drew positive traction amid growing expectations that the US Federal Reserve (Fed) will lower interest rates in the upcoming FOMC meeting. This dovish outlook has kept the US Dollar near two-week lows, benefiting the non-yielding yellow metal. The overnight rebound and follow-through gains highlight strong underlying bullish sentiment.
Support for Gold also stems from persistent geopolitical tensions, particularly the ongoing Russia-Ukraine conflict. Speculation over a peaceful resolution remains uncertain, while threats of further escalation have strengthened safe-haven demand. Additionally, reports suggest that Kevin Hassett is the frontrunner to succeed Fed Chair Jerome Powell, adding to dovish market expectations and keeping interest rate-sensitive assets like Gold in focus.
Traders are closely monitoring this week’s US macroeconomic releases, including Wednesday’s ADP private-sector employment report and ISM Services PMI, alongside Friday’s Personal Consumption Expenditure (PCE) Price Index. Recent US data signals a gradual economic slowdown, bolstering hopes for a 25-basis-point rate cut, currently priced in at nearly 90% probability according to the CME FedWatch Tool.
Technically, Gold needs acceptance above $4,250 to build on bullish momentum, with potential targets at $4,265, $4,300, and $4,340. On the downside, support near $4,180 and $4,150 is critical, with a break below this range possibly dragging prices toward $4,100-$4,060.
Finally, Gold remains supported by dovish Fed expectations and geopolitical tensions, but acceptance above $4,250 is crucial for further upside, while key support holds near $4,150-$4,180.
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