Gold Forecast: Grinding Higher Amid Increased Fed Cut Bets, Shutdown Deal

• Gold forecast shows bulls in dominance amid optimism regarding an end to the US shutdown this week.

• A weaker dollar, softer economic data, and disinflation trends continue boosting gold’s safe-haven appeal.

• Traders look ahead to commentary from FOMC officials on Wednesday for further policy cues into Fed easing. 

Gold forecast shows a bullish bias as it trades near $4,130 on Tuesday, reaching a 3-week peak amid rising expectations of a December Fed cut and an easing US dollar strength. According to the CME FedWatch Tool, markets price in a 64% probability of a 25 bps December cut. Meanwhile, softer US economic data, like the consumer sentiment and increased corporate layoffs, point towards policy easing to support the cooling economy. 

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Additionally, the overall market sentiment improved after President Trump expressed support for the bipartisan deal to end the US government shutdown, signaling that the government could potentially reopen by the week’s end. Meanwhile, the reopening will restore the release of delayed key data releases, such as the Nonfarm Payrolls (NFP) and CPI, and provide investors with visibility into the economic situation. 

Disinflation trends, weak economic data, and other economic concerns bolster the yellow metal’s demand. The optimism regarding an end to the US government shutdown and positive market sentiment further support gold. The subdued greenback, falling treasury yields, and the easing safe-haven demand do little to limit gold’s further upside. 

Gold Daily Key Events

On Tuesday, the US observes a US bank holiday, due to which the trading volume in the markets stays thin. Traders look ahead to tomorrow’s speeches by FOMC officials for further insights into Fed easing. 

Additionally, the markets anticipate the Consumer Price Index on Thursday, along with Retail Sales and the Producer Price Index on Friday, to get insights into the economic situation. 

Gold Technical Forecast: Bulls Hold Intact, Eying $4,200

Gold’s 4-hour chart reflects a bullish momentum, as it trades near $4,130. The prices remain above the 50-, 100-, and 200-MAs, signaling sustained buying interest.

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The RSI stands near 73, indicating overbought conditions. However, a clear trend reversal seems unlikely. Bull eyes a potential break above $4,150 to extend gains towards $4,200 and $4,300. 

On the contrary, a decisive drop below $4,055 could trigger a downside towards $4,010 and $3,965, highlighting short-term weakness. 

Support Levels

• $4,055
• $4,010
• $3,965

Resistance Levels

• $4,150
• $4,200
• $4,300

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