Gold prices edged higher on Wednesday as investors recalibrated their expectations for U.S. monetary policy, with XAU/USD trading around $4,171, approaching two-week highs after closing nearly flat on Tuesday. The precious metal has been underpinned by growing optimism that the Federal Reserve may adopt a softer policy stance in the coming months, even as global geopolitical dynamics continue to influence investor positioning.

Market attention has been sharply focused on developments surrounding the Federal Reserve chairship. White House Senior Adviser Kevin Hassett has emerged as the leading candidate for the role, according to recent reports. Hassett’s potential elevation is being interpreted as a dovish signal by traders, given his history of advocating for interest rate reductions to stimulate economic growth. The possibility of a leadership change has triggered a subtle shift in expectations for the Fed’s December policy decision, with markets increasingly pricing in a higher probability of a rate cut.

Supporting this sentiment, delayed U.S. economic data released on Tuesday painted a softer macroeconomic picture. Consumer spending showed signs of deceleration, while producer price inflation moderated, easing concerns about runaway price pressures. Collectively, these indicators have bolstered the market narrative that the Fed could pivot towards a more accommodative stance, which historically benefits non-yielding assets such as gold.

Analysts note, however, that gold’s rally faces potential headwinds from diminishing safe-haven demand. Reports suggesting incremental progress in Russia-Ukraine peace negotiations have alleviated some geopolitical risk premiums, prompting cautious positioning among investors who typically flock to gold during periods of heightened uncertainty. Despite this, technical indicators point to continued upside momentum for the yellow metal.

Gold’s intraday performance has been supported by its sustained trading above the 50-day Exponential Moving Average (EMA50), which has acted as a reliable support level in recent sessions. Relative Strength Index (RSI) readings have shown positive divergence, signaling bullish momentum amid the prevailing uptrend. Additionally, the pair’s price action remains aligned with a minor supportive trend line, reinforcing the stability of the ongoing bullish trend.

From a charting perspective, gold appears poised to continue its upward trajectory. The recent completion of a consolidation phase and the formation of a new local higher high suggest a high probability of a bullish continuation. We are now eyeing resistance levels in the $4,200–$4,250 zone as the next potential targets, with a decisive break above this range likely to attract further buying interest.

BUY GOLD

ENTRY PRICE: 4155

STOP LOSS: 4090

TAKE PROFIT: 4250

Gold prices climbed to a two-week high of US$4,169 on Wednesday. Earlier, stronger U.S. economic data bolstered expectations for a Federal Open Market Committee (FOMC) rate cut in December and weighed on the dollar. Spot gold rose over 0.7% to US$4,169, its highest level since November 14. Market expectations now lean more toward a December rate cut. Dovish comments from Federal Reserve officials and robust economic data bolstered this case, providing a boost to gold from a yield perspective.

Additionally, as December—the traditional peak season for gold sales—approaches, gold prices have firmly settled above the US$4,000 mark, increasing the likelihood of another historic high. From East to West, physical gold demand surges around year-end as Asia's wedding season—particularly in India—coincides with the Christmas and New Year holidays in Europe and the Americas. Meanwhile, central banks' ongoing gold purchases to bolster foreign exchange reserves and continuous inflows into gold ETFs further bolster prospects for another price rally.

From a technical perspective, after gold prices broke through the key level of US$4,161 on Wednesday, the market signaled an early upward trend for bulls to push prices higher later, thereby laying the groundwork for testing the target of the symmetrical AB=CD pattern (US$4,346).

The immediate focus now is on market liquidity ahead of Thanksgiving Eve. Should liquidity decline, it could trigger a degree of selling pressure, potentially disrupting the overall upward structure. A sell-off below the US$4,109 level may necessitate a reassessment by bullish positions.

Trading Direction: Buy

Entry Price: 4125

Target Price: 4346

Stop Loss: 4085

Valid Until: December 12, 2025 23:55:00

Support: 4136, 4125, 4109

Resistance: 4170, 4211, 4232

U.S. retail sales missed the consensus estimate by a wide margin, signaling that consumer momentum is even softer than markets had feared. The deceleration feeds directly into inflation and growth expectations: weaker household spending dampens the rebound risk for price pressures, prompting investors to price in an earlier and/or larger Fed easing move, which compresses both nominal and real yields. Over the past few days the implied probability of a December cut has surged—CME FedWatch and futures now assign a markedly higher chance to that scenario. This rapid repricing of the rate path is the key catalyst behind gold's latest spike.

Moreover, liquidity injections and portfolio rebalancing are amplifying gold's price swings. A softer USD lowers the purchasing cost for non-dollar-based investors, while safe-haven and hedging demand rebound as macro uncertainty rises. Inflows into institutions and selected ETFs provide a second-layer bid for the metal. With U.S. nominal yields in a downtrend, the opportunity cost of holding a zero-coupon asset declines; this narrative is mutually reinforced by both headline catalysts and flow dynamics, sustaining gold's near-term strength.

It should be noted that the current uptrend is highly contingent on the continuity of data and expectations. Should subsequent retail, employment, or inflation data show signs of recovery, or should Fed officials adopt a hawkish tone, market bets on a December rate cut could rapidly shrink, with a rebound in the dollar and yields exerting downward pressure on gold.

On the 4-hour chart, a textbook symmetrical triangle has formed as successive highs drift lower and lows edge higher. Price is now pressing against the upper trendline resistance. Momentum appears to be waning. A lacklustre test—i.e., no decisive close above the trendline on materially expanded volume—would favour a near-term rotation back toward the lower bound of the triangle. Conversely, a high-volume breakout and sustained hold above the trendline would open extension room, with 4,250 the first objective and 4,300 the next acceleration target.

Trade Direction: Buy

Entry Price: 4120.00

Target Price: 4340.00

Stop Loss: 4080.00

Valid Until: December 10, 2025, 23:00:00

Support: 4146.55/4110.99

Resistance Levels: 4245.09/4300.00

The Canadian dollar's exchange rate remains generally stable, with market expectations indicating that the Bank of Canada is likely to keep interest rates unchanged in the near term. At the October policy meeting, the Bank reduced its benchmark rate by 25 basis points to 2.25%, signaling the end of its monetary easing cycle. Contrarily, analysts from Citigroup project further interest rate cuts in 2026, citing potential downside risks to economic growth and inflation next year. This year, North American retail and macroeconomic environments have displayed complexity and resilience amid multiple stresses, with notable shifts in consumer behavior and price inflation in Canada and the United States. In Canada, the upcoming Black Friday shopping season has yet to commence, but retailers are already experiencing pressure due to anticipated consumer budget constraints. Ongoing inflation and rising living costs have led several surveys to suggest that Canadian shoppers may curtail holiday spending this year, compelling merchants to extend promotional campaigns from Halloween through late December. Black Friday has evolved from a single-day discount event into a multi-week promotional cycle, with retailers continuously launching incentives to maintain consumer engagement. Some small businesses have aligned with this trend to boost foot traffic and clear inventory; for instance, Wolf & Rebel in Windsor leverages substantial discounts to attract shoppers amid rising costs and tightening consumer budgets, while home decor brand VdeV participates in promotional activities driven by heightened consumer expectations for deals. Major retail chains have advanced their discount schedules and increased promotional intensity—Best Buy and Walmart, for example, initiating sales earlier than previous years and extending them over several weeks in an effort to evenly distribute customer flow and encourage early purchases. Despite the common narrative of supporting the local economy through "buying Canadian-made" products, this sentiment has diminished somewhat this year, with consumers predominantly prioritizing price considerations. Surveys by the Bank of Canada indicate that most consumers are unwilling to pay a premium for domestically manufactured goods. Against the backdrop of persistent cost-of-living pressures, pricing remains the primary driver throughout the promotional season.

According to the CME FedWatch Tool, the probability of the Federal Reserve cutting interest rates by 25 basis points to a target range of 3.50%-3.75% at the December meeting has risen from 50.1% to 85.3% over the past week. The dovish outlook from the Fed was further reinforced following remarks by New York Federal Reserve President John Williams on Friday, where he indicated potential support for a rate cut at the December policy meeting. CNBC reported Williams as saying, "I believe monetary policy is currently slightly restrictive, though somewhat less so than before recent adjustments, and there remains room for further modifications in the near term." He emphasized the necessity of further easing to sustain economic growth amid signs of a slowdown and a cooling labor market. In addition to Williams' dovish guidance, subdued U.S. economic data has exerted downward pressure on the dollar, with recent reports showing a moderation in core producer inflation, excluding volatile food and energy prices, and modest retail sales growth in September.

In the 1D timeframe for the USDCAD, the Bollinger Bands are narrowing. The EMA12 short-term moving average has flattened, and the price is oscillating near EMA12. The MACD bullish momentum is gradually weakening, with the MACD line and signal line approaching a death cross. A decline toward the EMA50 around 1.4 is highly probable. The RSI value is at 54, suggesting strong market hesitation and potential for a trend reversal. In the 4H timeframe, the Bollinger Bands are also narrowing, and the MACD's MACD line and signal line are retracing towards the zero-axis but still remain some distance away, indicating the correction is not yet complete. Support levels are at the lower Bollinger Band and EMA200, approximately 1.406 and 1.402 respectively. The RSI at 42 reflects prevailing market pessimism. It is recommended to go short at the highs.

Trading Direction: Sell

Entry Price: 1.408

Target Price: 1.4

Stop Loss: 1.414

Support: 1.4, 1.392, 1.362

Resistance: 1.414, 1.42, 1.44

Sterling's latest leg higher has been driven chiefly by broad-based USD weakness. The USD pressure stems from weaker-than-expected U.S. data and recent dovish signals from Fed officials. Focus now turns to Chancellor Rachel Reeves' forthcoming Budget. Against a challenging fiscal backdrop, the Treasury is expected to unveil tax-raising measures worth tens of billions of pounds to plug the deficit and bolster the UK's fiscal buffer.

Despite pre-election pledges by Chancellor Reeves and PM Starmer to shield "working people" from higher taxes, the Treasury is now set to widen the tax base in response to deteriorating public-financed metrics. The flagship measure is a two-year extension—to FY-2029/30—of the freeze in both the personal allowance and the higher-rate threshold for income tax, a fiscal drag that is projected to yield about £8 bn per annum in additional receipts.

Option markets are on high alert. Overnight GBP-implied volatility exploded to nealy 12% on Tuesday from < 2% at the start of the week, signalling aggressive hedging against outsized GBP moves once the Budget is released.

October CPI dropped to 3.6% YoY, reinforcing dovish pricing in the short-sterling strip. A 25 bp Bank Rate cut in December is now fully discounted at an 80% probability, pushing 10-y Gilt yields lower ahead of the fiscal event.

U.S. data released also warrant attention. The jointly-issued September figures from the Commerce Department and the Department of Labor showed a modest growth profile: headline retail sales rose only 0.2% MoM, missing the 0.4% consensus and decelerating sharply from August's revised 0.6%. At the same time the producer price index increased 0.3% MoM, in line with expectations, but the annual rate stayed unchanged at 2.7% for a second straight month. Both releases were postponed because of the 43-day federal government shutdown.

In response to the data, market analysts flagged their lagging nature as diluting any immediate market punch.

"Inflation dynamics have shifted more dramatically than consumer spending; the price-level adjustment to the new-tariff reality is probably in its late stages," said Brian Jacobsen, chief economist at Annex Wealth Management.

Peter Cardillo, chief market economist at Spartan Capital Securities, emphasized that core PPI printed below consensus and remains sub-3% YoY, evidence that inflation is not re-accelerating—conditions he views as green-lighting a December Fed rate cut.

He added that the economy is exhibiting a pronounced K-shaped profile: high-income cohorts continue to prop up consumption, while middle- and lower-income segments are already showing fatigue.

Recent dovish remarks from within the Fed have further cemented market expectations of an imminent rate cut. New York Fed President John Williams stated that the policy rate could decline "in the near term," while San Francisco Fed President Mary Daly and Governor Christopher Waller have both voiced support for a December reduction. According to the CME FedWatch Tool, the implied probability of a 25 bp rate cut at the December FOMC meeting has surged to 84.9%, up from just 50.1% a week ago, underscoring the accelerating convergence toward a monetary-policy pivot.

Weekly Technical Outlook: GBPUSD is consolidating around the EMA50. The MACD fast/slow lines have pulled back to the zero-axis. A renewed bullish crossover (golden-cross) would expose the EMA12 at 1.324 and the Bollinger mid-band at 1.340. RSI sits at 45, signalling prevailing pessimism.

Daily Technical Outlook: Price has cleared both the EMA12 and the Bollinger mid-band. The immediate bias points toward the EMA200 near 1.3246. MACD remains in a golden-cross formation while still pulling back toward the zero-line, implying the rebound is incomplete. RSI at 51 reflects a wait-and-see mood. Overall, the short-term rally is intact.

Therefore, the short-term strategy is recommended to go long first, then short.

Trade Direction: Sell

Entry Price: 1.324

Target Price: 1.29

Stop Loss: 1.34

Support: 1.3/1.29/1.28

Resistance Levels: 1.324/1.33/1.34

Canada’s persistent inflation backdrop continues to reinforce the Bank of Canada (BoC)’s guidance that it may have concluded its easing cycle. In October, the headline Consumer Price Index (CPI) slowed to 2.2% year-over-year (YoY) from 2.4% in September, primarily reflecting lower gasoline prices.

However, excluding volatile food and energy components, the core CPI component rose to an eight-month high of 2.7% YoY, up from 2.4% in September. Furthermore, the BoC’s preferred core CPI measure (the average of trimmed and median CPI) printed at 2.95% YoY, remaining consistently above the central bank's 2% target. Market pricing currently implies a stable BoC policy rate of 2.25% over the next 12 months, with rate hikes even being anticipated over the following two years.

U.S. inflation indicators showed signs of stabilization in September. The Producer Price Index (PPI) rose 2.7% YoY, aligning with forecasts and the August reading, suggesting that wholesale price pressures have leveled off. The Core PPI offered relief, easing to 2.6% from 2.9%, falling below expectations.

Consumer activity, meanwhile, appeared to weaken. Retail Sales rose only 0.2% month-over-month (MoM) in September, a noticeable slowdown from the 0.6% increase in August, pointing toward softer consumption trends. Compounding this, the Conference Board reported that household sentiment deteriorated significantly in November, with Consumer Confidence dropping 6.8 points to 88.7 from 95.5 in October.

Federal Reserve Governor Christopher Waller publicly supported a rate cut in December, though he noted that a move in January is less certain. Waller emphasized the weakening labor market, stating: "The labor market is weak; it continues to weaken." This dovish sentiment was echoed by San Francisco Fed President Mary Daly, who maintained confidence that the Fed can guide inflation back to target, suggesting the risk of an inflationary flare-up is diminished. New York Fed President John Williams added that the Fed could still cut rates in the "near term," significantly boosting the implied probability of a rate reduction at the December 9-10 meeting.

Despite the prevailing dovish shift, recent U.S. economic data was mixed but showed resilience. September's Non-Farm Payrolls (NFP) increased by 119,000, comfortably beating the 50,000 forecast, although the August reading was sharply revised to a 4,000 loss. The Unemployment Rate rose to 4.4%, hitting its highest level in four years. Wage growth showed moderation, with Average Hourly Earnings rising 0.2% MoM in September. Despite the Federal Open Market Committee (FOMC) being openly divided, the collective commentary from key Fed officials has increased the probability of the central bank reducing borrowing costs.

The USDCAD pair appears to be on track to form a Double Top pattern at the 1.4139 resistance level. This level is highly significant, as the price previously rejected sharply downward from this exact point. A renewed rejection from this zone would confirm the double top formation, triggering a bearish correction with a primary target set at 1.3981, the next major support level.

This target is technically sound as it aligns perfectly with the 0.618 Fibonacci retracement level—a zone where deep corrections are typically drawn. In the event of a bearish correction, this Fibonacci cluster would function as a strong price magnet. The Relative Strength Index (RSI) is currently at 68.40, approaching overbought territory. While it still has room to climb, it is probable that the price may manage one final bullish impulse to test the local high before commencing the downward correction.

On the 4-hour chart, the 100-period and 200-period Moving Averages (MAs) are located at 1.4058 and 1.4032, respectively. A bearish cross and subsequent close below both these key MAs would signal an acceleration in the downward momentum, confirming the technical pattern and opening the path to the 1.3981 support target.

Trading direction: Sell

Entry price: 1.4140

Target price: 1.3985

Stop loss: 1.4190

Validity: Dec 05, 2025 15:00:00