Image by Linda Hamilton from Pixabay
 

Gold (XAUUSD) is consolidating near a key level as short-term pressures challenge its recent momentum. A firmer US Dollar and stronger equity markets have weighed on safe-haven demand. However, soft labor data and cooling inflation have strengthened the case for Federal Reserve rate cuts. This environment continues to support gold's long-term structure, even as near-term flows remain mixed.
 

Gold Benefits from Soft Jobs Report and Fed’s Dovish Tone

Gold is holding steady near an important level, preserving its long-term upward structure. Recent economic data has fueled expectations that the Federal Reserve will ease policy soon. The November ADP report showed private payrolls unexpectedly declined by 32,000. This marked a sharp turn from the revised 47,000 gain the previous month and signaled further weakness in the labour market. Slowing employment growth raises the likelihood of a near-term rate cut, which historically benefits non-yielding assets like gold.

Additional data points have confirmed a broader cooling in the US economy. Manufacturing and services indicators have retreated, and inflation appears to be slowing. Several Fed officials have also adopted a more dovish tone. This has added to market expectations for a 25-basis-point rate cut at the upcoming FOMC meeting. This environment typically creates a favorable backdrop for gold as real yields decline.

Furthermore, macro conditions continue to shape market flows, adding pressure to gold's short-term outlook. The US Dollar’s mild recovery is placing a cap on gold’s upward momentum. Equities have extended their gains as easing policy expectations lift market confidence, reducing demand for defensive assets like gold. Still, gold continues to hold a strong structural position amid softening rate expectations and persistent global risks.
 

Gold Consolidates in Rising Wedge Pattern after Resistance Rejection

The gold chart below shows a well-defined ascending broadening wedge pattern that began forming in early 2024. This structure is characterized by higher highs and higher lows, with widening price swings. The upper and lower trendlines have acted as dynamic boundaries, guiding price action throughout the year.
 

(Click on image to enlarge)

In October 2025, gold touched the upper boundary of the wedge and faced strong resistance. The rejection led to a sharp pullback. Despite the decline, gold stabilized quickly, suggesting the uptrend remains firmly in place. The recent recovery from the $4,100 zone indicates renewed buying interest near key intermediate support.

Currently, gold is consolidating within the wedge pattern. If macroeconomic conditions continue to favor policy easing and Dollar weakness, the metal could retest the upper resistance. A breakout above the wedge would signal a major bullish continuation and open the door to significantly higher price targets.
 

Gold Outlook: Structural Support Holds as Macro Tailwinds Persist

Gold remains in a constructive technical setup despite recent weakness. The ongoing consolidation within the broadening wedge reflects a pause rather than a reversal. Short-term headwinds from a firmer Dollar and rising equity markets have cooled momentum, but the broader backdrop still favors upside. Slowing economic data, soft inflation, and growing expectations for Fed rate cuts continue to support gold’s long-term bullish case. As key support levels hold, the metal remains well-positioned to resume its upward move once macro conditions align. 

More By This Author:

Gold Supported By Dovish Fed Signals And Geopolitical Risks
Gold Builds Momentum On Dovish Fed Signals And Escalating Geopolitical Tensions
Gold Dips On Fed Signals As Support Builds From Global Policy Moves