Gold soars as markets price in possible interest rate cuts

In the context of increasing geopolitical tension and expectations of more flexible monetary policy, the gold price reached its weekly peak, consolidating as the preferred asset for risk-averse investors. The XAU/USD pair finds solid support around US$ 4,427-4,428, reflecting the convergence of multiple favorable catalysts that sustain the bullish momentum.

The pillars supporting the recovery of the precious metal

The search for safety intensifies in a scenario where geopolitical risks remain on the radar. Recent events—from US military incursions in Venezuela to escalating tensions between Saudi Arabia and the United Arab Emirates, along with instability in Iran and the prolongation of the Russia-Ukraine conflict—serve as anchors for the gold price. Simultaneously, the US dollar weakens amid concerns over the Federal Reserve’s independence from the Trump administration, a dynamic that further boosts the gains of the yellow metal.

Regarding economic indicators, the outlook remains mixed. Manufacturing PMI data released on Monday show stability, with the S&P Global indicator at 51.8, suggesting continued expansion. In contrast, the ISM reported contraction in November (a decline from 48.2 to 47.9), signaling weakness in the industrial segment. This dichotomy reinforces bets on two rate cuts by the US later this year, with the possibility of the Fed starting the cycle in March.

Dollar under pressure: the favorable scenario for non-yielding assets

The fragility of the US dollar unequivocally benefits gold, which does not generate yield. Traders continue to discount the possibility of monetary easing, especially after the mixed PMIs that offered no resistance to dovish expectations. The anticipation of the US NFP report scheduled for Friday keeps market participants on alert, awaiting additional clues about the trajectory of interest rate cuts. It is expected that this employment indicator will provide the necessary directional impetus for the coming weeks.

Technical perspective: consolidation before the explosion?

From a technical standpoint, the scenario looks promising for optimists. The break above the 100-hour Simple Moving Average during the early morning signals an important turning point. The MACD has turned positive on the one-hour chart, with the MACD line slightly above the signal near the zero mark, suggesting acceleration of momentum. The RSI is around 68, close to overbought, reflecting continued strength.

The critical resistance zone is between US$ 4,445-4,450. A consolidation above these levels would open the doors to new highs. The 100-hour Moving Average, currently at US$ 4,373.28, acts as a strong dynamic support. As long as the price remains above this line and the MACD stays positive, corrections should remain superficial, supporting the short-term bullish trend. An RSI move above 70 would solidify the bullish scenario, while failure to surpass this level could condition gains to consolidations.