As global markets enter a period of heightened anticipation, Spot Gold (XAU/USD) demonstrates resilient strength, holding firm near multi-week highs. Investors worldwide are recalibrating their portfolios ahead of the U.S. Federal Reserve’s December policy decision, with recent economic indicators and geopolitical undercurrents painting a supportive backdrop for the precious metal.

Weekly Market Recap: A Steady Bid Underpins Gold Prices
The trading period from December 1–5 saw gold prices consolidate in a notably tight range, reflecting a market in wait-and-see mode. Despite a marginal weekly decline of 0.41%, XAU/USD closed at $4,198.68, firmly above key technical levels. Trading activity was bracketed between $4,163.80 and $4,264.70, with buyers consistently stepping in on any dip, underscoring the underlying bullish sentiment.

This steadfast support was fueled by shifting interest rate expectations. According to the CME FedWatch Tool, market-implied probability for a 25-basis-point rate cut at the December meeting surged above 85%, a significant recalibration from just weeks prior. This repricing acted as a core driver, diminishing the opportunity cost of holding non-yielding assets like gold.

Economic Data Fuels the Dovish Narrative
A series of softer economic readings provided tangible fodder for the rate-cut camp:

  • Labor Market Cooling: Private payrolls data from ADP unexpectedly contracted, while reports from outplacement firm Challenger, Gray & Christmas indicated a rise in corporate layoff announcements. Although the delayed September government jobs report showed moderate gains, the broader trend suggests a cooling labor landscape, a factor the Fed closely monitors.

  • Inflation Trends Supportive: The release of the September Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—offered no negative surprises. With core inflation easing, the data alleviated fears of reaccelerating price pressures, a green light for potential policy easing. This analysis aligns with broader inflation discussions found in resources like Investopedia’s guide to inflation indicators.

  • Political and Policy Uncertainty: Market chatter surrounding potential leadership changes at the Federal Reserve added another layer of complexity. Suggestions of a more dovish successor to Chair Jerome Powell reinforced expectations for a protracted easing cycle, regardless of the 2026 political landscape.

Technical Perspective: Bullish Structure Intact
From a chart standpoint, gold’s posture remains constructive. The weekly close above the pivotal $4,133.95 level—representing the 50% Fibonacci retracement of the prior major swing—keeps the immediate bias tilted upward for buyers.

  • Resistance: The immediate ceiling is the weekly high at $4,264.70. A decisive breakout above this barrier could open the path toward the all-time high near $4,381.44.

  • Support: The $4,133.95 level now serves as a crucial bull-bear barometer. A sustained break below could see a deeper pullback toward $4,075.58. The primary value zone for long-term buyers, however, resides between $3,846.50 and $3,720.25, an area that would likely require a fundamental shift in the macroeconomic narrative to be revisited.

The Week Ahead: All Eyes on the FOMC
The forthcoming Federal Open Market Committee (FOMC) meeting on December 9-10 will be the unequivocal market catalyst. Beyond the rate decision itself, Chair Powell’s press conference and the updated Summary of Economic Projections (SEP) will be scrutinized for clues on the 2025 policy path.

Market participants are bracing for potential volatility, as the Committee appears visibly split. Whether the Fed delivers a “hawkish cut” or a straightforward easing move, the directional bias for policy remains accommodative—a historically supportive environment for gold. Furthermore, lingering geopolitical tensions, from Eastern Europe to the South China Sea, continue to bolster gold’s safe-haven appeal, a dynamic extensively covered by financial hubs like Reuters Commodities News.

Bottom Line
Gold enters a critical week supported by a trifecta of factors: firming rate cut expectations, benign inflation data, and persistent geopolitical risks. While the FOMC announcement may trigger short-term volatility, the technical and fundamental groundwork suggests any significant pullback is likely to attract renewed buying interest, keeping the broader bullish outlook intact for XAU/USD.

Disclaimer: Trading leveraged products like forex and CFDs carries a high level of risk and may not be suitable for all investors. Losses can exceed your initial deposit. The information provided here is for educational purposes and does not constitute financial advice. Always conduct your own research and consider seeking advice from an independent financial advisor.