Gold fluctuations today: between profit-taking and hopes of interest rate cuts

Gold Retreats from Its Highs as the U.S. Government Reopens

Gold prices experienced clear volatility today, Friday, November 14, as they declined from their recent peak of $4,244.94 per ounce over the past three weeks. The main driver behind this dip was the reopening of the U.S. government after the longest shutdown in history, which triggered a broad sell-off across financial markets. Investors responded by shifting their strategies from buying to profit-taking, especially after the notable rise the yellow metal saw in recent days.

Despite this decline, gold still maintains a strong weekly gain of approximately 5.4%, reflecting ongoing demand for safe-haven assets in an unstable economic environment. Prices are currently fluctuating between $4,171 and $4,201 per ounce, ranges that indicate a balance between bullish and bearish forces.

Missing Economic Data Adds to Uncertainty

One of the main effects of the prolonged government shutdown is the loss of vital economic indicators, especially those related to the U.S. labor market. Weak labor market expectations were among the key reasons for gold’s rally, but the interruption of official data flows has created uncertainty, causing traders to adopt a more cautious stance.

This ambiguity makes the Federal Reserve’s assessment of the economic situation more difficult, directly impacting expectations of a potential interest rate cut in December.

Reduced Chances of a Cut Put Pressure on Gold

There have been negative developments on the monetary policy front. The probability of the Federal Reserve cutting interest rates in December has decreased from 64% to 51%, according to monitoring tools. This decline followed hawkish statements from several Fed members, along with warnings from Chair Jerome Powell about the lack of guarantees for any additional cuts this year.

This directly affects gold, as non-yielding assets like the yellow metal benefit from a low-interest-rate environment. Rising rate expectations diminish gold’s relative attractiveness.

Dollar Weakness Supports Gold

On the positive side, the DXY dollar index continued its decline for the second consecutive session. A weaker dollar makes gold more attractive to investors holding other currencies, as its price in their local currencies decreases.

This dollar weakness partially offsets the impact of rising rate expectations, keeping gold in a very sensitive balance zone.

Bond Yields Increase the Opportunity Cost

U.S. Treasury yields rose during the session, increasing the opportunity cost of holding gold, which does not generate direct income. As bond yields climb, the opportunity cost of choosing gold over other yield-bearing investments also rises.

This factor has contributed to limited gains during today’s morning trading hours.

Technical Levels Analysis: Where Is Gold Heading?

From a technical perspective, gold is moving near a critical resistance zone between $4,188 and $4,200. A decisive breakout above this zone could open the way for an additional bullish move toward $4,270, then test the historical high at $4,381.

On the support side, the $4,171 level forms the first real line of defense. Breaking below this level could send prices back toward $4,046, the primary level for the weekly bullish trend. In a deeper correction, the $3,928 level acts as another key support.

The Relative Strength Index (RSI) is currently moving between 60 and 67 points, indicating positive momentum without overbought conditions, leaving room for further upside.

Silver Leads Other Precious Metals

While gold faces a temporary decline, silver has performed relatively stronger, rising by 1.3% to reach $53 per ounce. Silver is heading toward its best week since September 2024, with a total increase of 9.7% since the start of the week.

Platinum also rose by 1% to $1,596.10 per ounce, while palladium gained a larger 1.4% to $1,446.31 per ounce. These joint movements reflect continued demand for precious metals as safe havens.

What’s Next After the Week?

Gold enters a critical zone as the week’s trading nears its end. Traders typically tend to reduce their positions on Fridays, which could increase the likelihood of additional volatility or profit-taking near resistance levels.

The bullish scenario remains the primary outlook as long as gold stays above $4,171. A break above $4,200 is the necessary condition to resume the upward wave toward higher targets.

Conversely, a close below $4,171 could reintroduce selling pressure and delay gold’s journey toward new record levels. Next week will bring important economic data that could shed light on the direction of U.S. monetary policy, which will be a key catalyst for gold price movements.