Gold pushed higher this week as markets continued to recalibrate toward a December Fed rate cut. The move come in tandem with notable falling 10-year yield, which provide some tailwinds to the precious metal too. More upside is expected in Gold in the near term, even though a new record is still expected next year, rather than this.
The Fed’s internal balance has moved noticeably toward the dovish camp. Mary Daly, in her WSJ interview, argued that labor-market fragility now poses a greater risk than inflation and said she supports easing next month. While not a vote, her comments—combined with John Williams’ earlier pivot—validates that the center of the Fed’s spectrum has shifted meaningfully towards easing. That has driven expectations for a December cut to around 80%.
Technically, 10-year yield’s break of 4.056 support suggests that corrective rebound from 3.947 has completed at 4.162, after hitting falling channel resistance that started at 4.629 (May high). Further decline would now be seen towards 3.947 low.
Gold’s breakout above 4,132.77 indicates that pullback from 4,244.86 bottomed at 3,997.73. The rally from 3,886.41, as the second leg of the broader corrective pattern from 4,381.22, remains in progress. Further rise is expected to 4,244.86 and higher, as support by weakness in yield. But strong resistance should emerge from 4,381.22 high to cap upside to bring the third leg of the pattern.
