Gold remains in the red as markets await new clues from upcoming U.S. inflation data and comments from Federal Reserve officials

Gold remains on the back foot, staying in the red for the second consecutive day, pressured by a stronger dollar and a reduction in U.S. political uncertainty, which had recently driven safe-haven demand. Additionally, expectations of stronger Fed rate cuts have eased, further impacting gold’s appeal.

Trump’s election victory has shifted the focus toward policies that aim to stimulate economic growth, potentially fueling inflation and prompting a reassessment of the Fed’s current monetary stance.

Recent comments from Fed Chair Powell suggest the central bank may adopt a less aggressive approach to rate cuts, with the easing cycle likely ending sooner than initially anticipated. This could diminish gold’s appeal as a safe-haven asset.

Key support levels at $2646/43 (Fibonacci 76.4% of $2602/$2790 / Nov 7 higher low) are under pressure, and a break below these levels could further weaken the near-term structure, with the next support levels at $2616/02 (top of the rising daily Ichimoku cloud / Oct 10 low). A violation of these supports would signal a potential reversal and open the door for a deeper correction.

This scenario is not unexpected, as gold has been in a strong uptrend for a year without significant correction. However, the metal’s fundamentals, which are currently the primary driver, are expected to set the direction moving forward.

Technical indicators have weakened on the daily chart, with negative momentum increasing. The moving averages (10/20/30-day) have turned bearish, and the southward-moving RSI suggests there may be more room for further downside.

Market participants are closely watching the upcoming U.S. October inflation data and speeches from several Fed officials later this week, which will offer fresh insights into the direction and pace of changes in U.S. monetary policy.

Res: 2686; 2700; 2749; 2758
Sup: 2643; 2600; 2560; 2471