Gold trades with a positive bias as dovish Fed outlook offsets firmer US Dollar

Gold trades with a positive bias but struggles to extend gains as the US Dollar rebounds.
Fed easing expectations for 2026 remain in focus after softer US labour market signals
On the technical front, XAU/USD remains in a bullish structure but is consolidating below the 4,350 resistance zone.

Gold (XAU/USD) rebounds on Wednesday after early losses, though a firmer US Dollar (USD) continues to cap upside momentum. At the time of writing, XAU/USD is trading around $4,335, up nearly 0.70% on the day.

Despite the range-bound price action seen so far this week, the broader bias for the yellow metal remains constructive, as a dovish Federal Reserve outlook and persistent geopolitical risks help limit downside attempts.

Market expectations continue to tilt toward further monetary easing by the Federal Reserve (Fed) in 2026 after Tuesday’s delayed US jobs data reinforced concerns about a cooling labour market, with attention now turning to Thursday’s Consumer Price Index (CPI) report.

The US economic calendar is relatively light on Wednesday, investors will parse comments from key FOMC members for additional clues on the Fed’s monetary policy path next year.

Market movers: US jobs data reinforce Fed easing expectations; geopolitical risks resurface

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 98.50, extending its rebound after briefly slipping below 98.00 on Tuesday, its lowest level since October 3.
Data from the US Bureau of Labor Statistics (BLS) showed that the US economy added 64,000 jobs in November, slightly above market expectations for a 50,000 increase, after payrolls fell by 105,000 in October due to the government shutdown. Meanwhile, the Unemployment Rate rose to 4.6%, above expectations of 4.4%, marking its highest level since September 2021.
The report also showed that US payrolls were revised down by a combined 33,000 over August and September, echoing remarks from Fed Chair Jerome Powell, who warned at last week’s post-meeting press conference that job gains since April may have been overstated by around 60,000.
Overall, the employment data suggest that the US labour market continues to cool. While November’s payroll gain came in slightly better than expected, the broader picture remains soft, with slower job creation, rising unemployment and easing wage growth. The data reinforce expectations that the Fed has room to ease policy, with markets currently pricing in two rate cuts next year.
Geopolitical tensions are back in focus after earlier optimism around progress in US-led Russia-Ukraine peace talks was overshadowed by fresh developments, with reports that US President Donald Trump ordered a blockade of sanctioned Oil tankers entering and leaving Venezuela.

Technical analysis: XAU/USD consolidates below 4,350 resistance

From a technical perspective, XAU/USD remains constructive after breaking above the $4,250 level, though near-term upside appears capped around $4,350, leaving prices vulnerable to a period of consolidation.

On the 4-hour chart, XAU/USD continues to trade within an ascending structure, supported by a rising trendline drawn from the mid-November lows near $4,000.

The 21-period Simple Moving Average (SMA), around $4,310, offers immediate dynamic support, followed by a stronger support zone near $4,250, where the 50-period SMA converges.

On the upside, a decisive break above the $4,350 region would be needed to clear near-term resistance and open the door for a retest of record highs and potentially further gains.

The Relative Strength Index (RSI) is holding near 58, remaining in neutral-to-bullish territory above its midline. Meanwhile, the Average Directional Index (ADX) at around 29.75 suggests the broader trend remains intact, though some cooling in momentum implies consolidation could precede the next directional move.