Gold remained steady during the low-volume trading on Thursday, synchronized with the US Thanksgiving holiday. XAU/USD held at $4,158. Gold prices are stabilizing due to limited updates, despite recent economic data showing a strong US job market and signs of falling inflation. According to the CME FedWatch Tool, there’s an 85% chance the Federal Reserve will cut rates by 0.25%. This impacts US Treasury yields, pushing the 10-year T-note yield below 4%. However, ongoing peace talks between Russia and Ukraine might lessen Gold’s status as a safe haven.

Increased Tensions and Economic Indicators

Rising tensions between Japan and China over Taiwan could lift Gold prices. US Initial Jobless Claims rose to 216K, which is better than the expected 225K, showing a strong labor market. Meanwhile, physical Gold exports from Hong Kong to China have decreased. Gold is trading around $4,160, with resistance at $4,200, $4,250, $4,300, and $4,381. If it falls below $4,150 and $4,100, it could test the 20-day SMA at $4,074 and $4,000. Gold is a safe-haven asset, a hedge against inflation, and is held by central banks to stabilize economies. Geopolitical instability and interest rates influence Gold prices. The value of Gold also relates to the US Dollar; a weak Dollar could boost Gold prices.

Strategies for Rate Cut Anticipation

With an 85% chance of a Federal Reserve rate cut in December, we should focus on bullish strategies for gold. This expectation puts pressure on US Treasury yields, and the 10-year note is already below 4%, creating a favorable environment for gold, which doesn’t yield interest. The key trade signal for the upcoming weeks is positioning for this expected policy change. We might consider buying call options with strike prices at or above the $4,200 resistance level, possibly targeting January 2026 expirations to give the trend time to develop. The Relative Strength Index (RSI) suggests buyers are gaining momentum, indicating a potential breakout. A move over $4,200 could open the way to test key levels at $4,250 and higher. This bullish outlook is supported by strong demand from central banks. Recent data from the World Gold Council for Q3 2025 revealed that global central banks added another 337 tonnes to their reserves, continuing the record pace of accumulation seen in 2023 and 2024. This institutional buying offers solid backing for prices, reducing downside risk. However, we must manage the risks of potential outflows from safe-haven assets. Any real progress in the Russia-Ukraine peace talks could reduce Gold’s appeal and provoke a sell-off. Additionally, the resilient US labor market, with recent unemployment claims at their lowest since April, poses a risk that the Fed could stall its easing plans. Geopolitical tensions in Asia, particularly between Japan and China regarding Taiwan, are providing support for Gold’s safe-haven status. These ongoing risks are likely to keep prices stable, even if a peace agreement in Europe occurs. This combination, along with a dovish Fed, makes a strong case for rising gold prices. This market situation is reminiscent of late 2023, when strong anticipation for rate cuts in 2024 led gold to rally significantly from below $2,000. Historical trends suggest that the period just before the first official rate cut can be the most profitable for long positions. The current consolidation around $4,160 seems to set the stage for a similar upward movement. Create your live VT Markets account and start trading now.

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