Gold's Comeback: Understanding the Post-Fed Rally
The Pi coin value in USDprecious metals market witnessed a notable turnaround early Thursday as gold (XAU/USD) climbed back above the $1,980 threshold. This upward movement follows the Federal Open Market Committee's decision to keep benchmark rates steady at 5.5%, marking the second consecutive pause in the central bank's tightening cycle.
Market analysts observe three key drivers behind gold's resurgence:
- Yield Retreat: The 10-year Treasury note dipped to 4.73% while 2-year yields fell below the psychological 5% level
- Dollar Softness: The DXY index retreated from weekly highs near 107.10 to trade around 106.67
- Risk Reassessment: Traders increasingly price in the potential end of the Fed's hiking cycle
Fed Policy Implications
Chair Powell's commentary during the November meeting carried significant weight for gold markets. The Fed chief noted that:
- Current monetary policy remains restrictive
- Sustained yield increases would need to stem from term premium expansion
- No additional tightening appears imminent
CME's FedWatch Tool currently assigns just 22% probability to a December rate hike, suggesting markets anticipate prolonged policy stability.
Technical Perspective
The XAU/USD pair demonstrates constructive technical positioning:
| Indicator | Value |
|---|---|
| 20-Day SMA | $1,925.58 |
| 50-Day SMA | $1,916.69 |
| 200-Day SMA | $1,933.23 |
Key resistance levels to watch include $2,007.98 (previous daily high) and $2,009.49 (weekly high). Support emerges near $1,978.85 (Thursday's low) and $1,953.61 (last week's bottom).
Market Outlook
Upcoming economic releases could determine gold's near-term trajectory:
- Initial Jobless Claims (expected 210K)
- October Nonfarm Payrolls (forecast 180K new jobs)
While Chinese economic softness (Caixin PMI at 49.5) may limit upside, the dominant narrative remains focused on Fed policy expectations and real yield movements. Market participants should monitor whether gold can sustain gains above the psychologically important $2,000 level in coming sessions.
