Gold Price Today: XAU/USD Rallies Toward $4,100 Amid Fed Speculation
Gold extended its rally on Monday, trading near $4,092 per ounce, as traders continued to price in a potential Federal Reserve rate cut in December. The precious metal gained over 2% to start the week, supported by optimism over the possible reopening of the U.S. government, even as the U.S. Dollar strengthened.
At the time of writing, XAU/USD hovered just below the critical $4,100 level, maintaining bullish momentum despite easing expectations for Fed easing.
Gold Rises as U.S. Shutdown Nears Resolution
Over the weekend, the U.S. Senate advanced a bipartisan measure aimed at reopening the federal government, with support from several Democratic lawmakers. President Donald Trump expressed optimism, saying the shutdown “looks very close to ending.”
Senate Republican leader John Thune noted that a stopgap funding vote could take place within hours, while House Speaker Mike Johnson plans to hold a related vote by Wednesday, according to The Wall Street Journal.
The potential resolution of the longest U.S. government shutdown in history has buoyed risk sentiment, supporting both the U.S. Dollar and commodities like gold.
Weak U.S. Data Fuels Recession Concerns
Despite the improved political outlook, recent U.S. economic data showed signs of softening:
- Consumer Sentiment: The University of Michigan’s index dropped to 50.3 in November from 53.6 in October, reflecting weaker household confidence.
- Job Cuts: Employers announced over 150,000 layoffs in October, the largest for that month in more than 20 years, according to Challenger, Gray & Christmas.
- Inflation Expectations: One-year inflation outlook rose slightly to 4.7%, while five-year expectations eased to 3.6%.
These data points have kept recession fears alive, prompting traders to assign a 67% probability of a December Fed rate cut, according to the CME FedWatch Tool—down slightly from 66.8% last week.
US Dollar and Yields Edge Higher
The U.S. Dollar Index (DXY) recovered 0.12% to 99.67, while 10-year Treasury yields edged up two basis points to 4.115%, remaining steady overall.
Real yields, which typically move inversely to gold prices, rose by two basis points to 1.832%.
Federal Reserve officials maintained a mixed tone:
- St. Louis Fed President Alberto Musalem noted inflation remains “closer to 3% than 2%.”
- San Francisco Fed President Mary Daly highlighted that while recent rate cuts have supported employment, they’ve also added mild upward pressure to inflation.
Gold ETFs Record Strong Inflows
The World Gold Council reported 54.9 tonnes of inflows into gold-backed ETFs in October, indicating sustained investor interest amid global uncertainty.
This strong institutional demand continues to support gold prices even as the U.S. Dollar strengthens and bond yields stabilize.
Technical Outlook: XAU/USD Eyes Break Above $4,100
From a technical perspective, gold remains bullish but faces resistance near the $4,100 mark.
- Immediate resistance: $4,100
- Next targets: $4,161 (October 22 high) and $4,200
- Support levels: $4,000, followed by $3,950 and $3,886 (October 28 low)
The Relative Strength Index (RSI) indicates strengthening bullish momentum, suggesting potential for further upside if buyers can maintain pressure above $4,000.
Outlook: Traders Watch Fed and Government Developments
As markets digest the evolving Fed policy outlook and shutdown negotiations, gold remains a key safe-haven asset. Traders will watch upcoming economic data releases and Fed speeches for signals on future rate moves.
If the U.S. government reopens and the Fed hints at policy easing, gold could extend its rally beyond $4,100, marking a fresh monthly high.
Bottom Line:
Gold prices remain resilient above $4,000 as investors balance Fed rate cut uncertainty, U.S. Dollar recovery, and renewed optimism over government reopening. With strong ETF inflows and sustained investor demand, the yellow metal could be gearing up for another push higher toward $4,200.
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