Gold Surges as Fed Pivot Gains Momentum

Gold prices have climbed to their highest level in two weeks, propelled by shifting expectations for U.S. monetary policy. Market participants are now pricing in an 84% probability of an interest rate cut by the Federal Reserve in December—a dramatic increase from the mere 50% chance reflected just one week earlier. This rapid reassessment follows the release of concerning economic indicators that suggest the Fed may need to act sooner than anticipated.

Recent U.S. economic data has revealed unexpected weakness, particularly in consumer spending. Retail sales expanded by just 0.2% in September, marking the most modest increase observed in four months. The year-over-year comparison presents an even clearer picture of cooling demand, with growth decelerating from 5.0% to 4.3%.

Federal Reserve Governor Stephen Miran explicitly connected deteriorating labor market conditions to the potential need for additional rate reductions. His comments followed similarly dovish signals from Fed Governor Christopher Waller on Monday. Together, these communications indicate that central bank officials are preparing financial markets for a shift toward easier monetary policy.

Key factors driving gold's upward move:

Should investors sell immediately? Or is it worth buying Gold?

• Declining real yields on U.S. Treasury securities
• Increasingly dovish commentary from senior Fed officials
• Persistent geopolitical tensions worldwide
• Weakening U.S. economic performance data

Dollar Weakness Amplifies Gold's Appeal

The U.S. dollar has simultaneously faced downward pressure, with the Bloomberg Dollar Spot Index declining 0.2% after already shedding 0.3% on Tuesday. This depreciation in the dollar makes gold more affordable for international buyers, creating additional demand for the precious metal.

Bullion advanced 0.8% to reach $4,161.10 per ounce, decisively breaking through the significant technical resistance level at $4,140. From a technical perspective, gold is now testing the upper boundaries of its November trading range.

Breaking Toward $5,000?

Market analysts suggest that a sustained breakout above $4,250 could open the path for further gains toward the $4,400-$5,000 range. With inflation expectations stabilizing and at least one Fed rate cut anticipated during the first half of 2026, gold appears positioned to maintain its upward trajectory. The macroeconomic environment delivers a clear message: as long as the Federal Reserve maintains its accommodative stance and geopolitical uncertainties persist, the path of least resistance for gold remains higher.