Gold markets exhibited classic profit-taking dynamics over the past 48 hours, reflecting traders’ complex expectations surrounding the Federal Reserve’s rate decision. On December 1, XAU/USD closed at $4,232.73, reaching an intraday high of $4,264.74, demonstrating robust upward momentum. However, prices retreated to $4,213.14 on December 2, declining approximately 0.47%, signaling selling pressure emerging at technical resistance levels.

The core driver of this volatility stems from dramatically rising market expectations for a December Fed rate cut, with traders now pricing in a 70-80% probability compared to the previous 30-35% estimate. This dovish policy outlook typically favors gold, as lower interest rates weaken the US dollar’s appeal and enhance gold’s attractiveness as a store of value. Simultaneously, the expected decline in US manufacturing PMI from 52.5 to 51.9 reinforces demand for safe-haven assets. The dollar’s slide to two-week lows further amplified this momentum, enabling gold to break through the critical $4,245.20 resistance level.

From a technical perspective, gold has successfully cleared the psychological $4,200 barrier and continues trading within an ascending channel. Analysts identify $4,300 as the next upside target, with the October high of $4,381 representing a further objective if supportive catalysts emerge. Goldman Sachs analysts have even suggested a $4,900 year-end target, recommending investors accumulate on dips. However, technical analysis also identifies a support zone near $3,965, where the market may consolidate before advancing further.

For average investors, this scenario translates into a straightforward dynamic: when central banks signal policy easing, traditional safe-haven assets like gold attract capital from those concerned about economic slowdown and currency depreciation. The recent pullback represents normal profit-taking rather than a trend reversal signal. Weak US economic data, persistent inflation expectations, and ongoing geopolitical tensions continue supporting gold’s intermediate uptrend. The December 10 CPI release and Fed rate decision will emerge as key catalysts shaping near-term direction.

Daily Chart

The daily chart shows XAUUSD in an uptrend since late November, repeatedly challenging and surpassing the $4245 key resistance level. Moving averages align bullishly with short-term averages above long-term ones, signaling strong upward momentum. Bollinger Bands indicate price is near the upper band but not overstretched, suggesting more room to rise. The MACD recently formed a bullish crossover, confirming strengthening momentum for further gains.

1H Chart

In the 3-5 day hourly chart, XAUUSD price has been consolidating between $4180 and $4245 with slight volatility. Short-term moving averages are intertwined due to brief retracements but show renewed attempts to push higher. Bollinger Bands narrowed then started to expand, signaling potential breakout. The MACD stays above zero and RSI hovers near 70, indicating a possibility of a strong breakout or a minor correction in the short term. Monitoring key levels will be crucial.

Technical Trend: The overall trend remains decisively bullish, with potential for either a breakout continuation or a healthy short-term pullback, guided by key support and resistance levels.

Technically, XAUUSD has broken a critical resistance zone formed since mid-November, creating a large bullish flag pattern that began around November 20th. The price is now testing the upper boundary of this pattern. Recently, a bullish engulfing candlestick appeared on the daily chart, indicating strong short-term bullish momentum. Traders should watch for the MACD golden cross and Bollinger Bands expansion, both signs pointing to a likely upward breakout.

Today’s GMT+1 economic calendar includes Australian current account and building approvals data showing economic adjustments, and a speech from US Federal Reserve Chair Jerome Powell. Since XAUUSD is highly sensitive to USD policies, Powell’s dovish remarks would likely boost gold prices, while hawkish tones could trigger pullbacks. Although no economic events directly target gold, the Fed’s signals remain a major market focus today.

Resistance & Support

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