Spot gold extended its technical rebound from late last Friday into Monday's Asian session, trading near $3,900 per ounce, up about 0.6% from the previous session's low of $3,870 per ounce, though it has fallen more than 5% from its mid-October high above $890 per gram (approximately $4,100 per ounce).
The metal staged an oversold recovery after two consecutive sessions of heavy losses, but the rebound momentum was notably weak, reflecting insufficient bullish conviction in the market.
The primary driver weighing on gold prices remains the repricing of the Federal Reserve's rate hike path.
Although the Fed held rates steady at its October policy meeting, multiple officials have delivered hawkish signals. Dallas Fed President Lorie Logan explicitly stated that the central bank "needs at least two more 25 basis point hikes," emphasizing that skipping a meeting does not change the policy endpoint.
Her FXSSpeechtracker score reached 8/10, above the historical average of 7.7/10, while the FXS Fed sentiment index rose to 143.62, well above the neutral level of 100, confirming that her remarks added extra hawkish pressure to dollar expectations.
Meanwhile, the CME FedWatch tool shows market pricing for a December rate hike at approximately 72.9%, a significant increase from the prior week.
Resilient inflation data has further reinforced this expectation. The combination of third-quarter GDP growing at a 3.4% annualized pace and core PCE rising 3.1% year-over-year gives the U.S. economy a "high growth plus high inflation" profile.
OCBC strategists noted that gold prices "failed to benefit from falling yields, suggesting new buying interest remains limited," even as earlier liquidation pressure may be easing.
Renewed weakness in the technology sector also weighed on market risk appetite, triggering concerns about broader deleveraging.
On the geopolitical front, new variables have emerged in the Middle East. Ukraine has resumed attacks on Russian refineries, ending a roughly two-week pause; Iran's supreme leader has also ordered senior military commanders to prepare for a new round of confrontation with the U.S. and Israel.
These factors provide a floor for gold prices, but with rate hike expectations dominating, safe-haven buying has failed to generate sustained momentum.
"The decisive factor will be whether incoming economic data prompts the market to reassess the rate outlook, shifting expectations toward a pause in tightening or a resumption of rate cuts. Until then, despite factors supporting the medium-to-long-term outlook, gold may continue to face selling pressure."
On the daily chart, spot gold is trading below all major moving averages and the 100-day moving average (around $4,210 per ounce), with a complete bearish structure. The price sits below the Bollinger Band middle rail (around $4,085 per ounce) and has even broken below the lower band (around $3,910 per ounce), suggesting strong downward breakout momentum.
RSI (14) is near 32, at the edge of oversold territory, indicating bearish momentum is stretched but has not yet reversed.
On the upside, resistance levels to watch are $3,910 per ounce, $4,085 per ounce, and the dense pressure zone formed by $4,210 per ounce and $4,265 per ounce. A reclaim of these levels would be needed to ease the current bearish setup.
On the downside, initial support lies at the previous session's low of $3,870 per ounce. A decisive break below could test $3,850 per ounce and even the $3,800 per ounce round number.
On the 4-hour chart, gold has rebounded from the $3,870 per ounce low and is currently consolidating between $3,880 and $3,910 per ounce. RSI has recovered from oversold territory to around 40, and the MACD histogram is narrowing below the zero line, suggesting short-term technical repair demand, though a rebound to around $3,910 per ounce may encounter renewed pressure.
Editor's Summary
The core tension for spot gold currently lies in the tug-of-war between "strengthening Fed rate hike expectations" and "residual geopolitical risk premium." In the short term, gold has found initial support near $3,870 per ounce and staged a technical rebound, but with December rate hike odds remaining elevated, upside room is limited, and the metal is more likely to consolidate within the $3,870 to $3,910 per ounce range.
Three variables warrant close attention going forward: first, Friday's U.S. Employment Cost Index (ECI) data—if wage growth continues to show resilience, it will reinforce rate hike expectations and further weigh on gold; second, substantive developments in the Middle East—if Ukraine's attacks on Russian refineries or Iran's military preparations trigger supply disruption concerns, safe-haven buying could drive gold higher; third, whether gold can effectively break above $3,910 per ounce, which is the primary technical gauge for determining whether the short-term bearish bias will ease.
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