VT 
Gold extended its upward momentum from $4,153 but the rally was quickly sold into, leaving price action mixed and volatile. The yellow metal continues to trade within a bullish channel formation, yet immediate signals point to weakening momentum. Trendline resistance at $4,338 defines the preferred sell-entry zone, while bespoke support sits lower at $4,133, marking the first major downside objective.
Fed Rate Cut Likelihood and Market Risk Mood
The spotlight is firmly on the December Fed meeting, where traders are debating whether policymakers will deliver the first rate cut since the tightening cycle began. While inflation has cooled, Fed officials remain cautious, signaling that any easing will be gradual. This uncertainty has created a fragile risk mood, with equity markets showing resilience but investors hedging defensively through gold.
Beyond monetary policy, the global backdrop is being shaped by geopolitical tensions and fiscal debates that add layers of caution to investor sentiment. In the Middle East, renewed clashes have kept energy markets volatile, raising fears of supply disruptions and inflationary spillovers. Meanwhile, trade friction between the U.S. and China has resurfaced, with disputes over tariffs and technology supply chains threatening to slow global growth. Europe, too, is facing heightened security concerns, as NATO expands its military exercises and China pushes for greater influence in Arctic shipping routes.
These developments underscore the fragile geopolitical order and reinforce the role of gold as a hedge against instability.
Fiscal debates in Washington and Europe are amplifying the uncertainty. In the U.S., lawmakers remain divided over budget priorities, with deficit concerns clashing against calls for continued stimulus. The lack of clarity on fiscal direction has weighed on investor confidence, prompting defensive positioning. Across the Atlantic, the European Central Bank has emphasized the need for fiscal discipline even as growth remains subdued. Member states are under pressure to balance debt sustainability with demands for energy subsidies and social spending, a tension that has capped euro strength and indirectly supported gold.
Together, these fiscal struggles highlight the difficulty of navigating policy in a fragile global economy, keeping investors wary and safe-haven demand elevated.
XAUUSD Technical Analysis
- Primary: 4,133 as the bespoke downside target, and 4,060 as the deeper corrective phase trigger
- Resistance: Sustained move above 4,393 would negate bearish bias and extend upside channel
- Bearish Setup: Sell rallies into around the 4,338 resistance. Target 4,133 and 4,060, with stops above 4,393.
- Bullish Setup: Long only if price breaks and holds above 4,393. This would extend upside potential and invalidate the bearish setup.
- Range Play: Trade between 4,060 and 4,338. Sell near resistance, reduce exposure near support.
Looking Ahead: Resistance Holds in the Face of Policy Uncertainty
The broader bullish channel remains intact for gold, but short-term momentum is fading. Rallies into resistance are expected to attract sellers, especially as traders await clarity from the Fed’s December meeting. The balance between rate cut speculation, geopolitical tensions, and fiscal debates in Washington and Europe will be decisive for its next move.
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