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Gold (XAUUSD) is holding steady as markets digest the Federal Reserve’s latest policy shift and its implications for future rate moves. The Fed delivered a widely expected 25 basis point cut, but Chair Powell’s cautious tone tempered expectations for further easing. In response, the U.S. Dollar rebounded, pressuring gold’s initial gains. At the same time, investors are closely watching U.S.–China trade negotiations, which remain a key driver of market sentiment. This evolving mix of monetary signals and geopolitical developments continues to shape gold’s short-term outlook.

Gold Stalls after Fed Cut as Powell Signals Data-Driven Approach
 

Gold remains supported by a combination of Fed-driven policy uncertainty and geopolitical risk. After the Fed’s 25 bps cut, markets initially leaned bullish, triggering a brief rally in gold. However, Jerome Powell’s remarks after the decision signaled a more cautious stance. He warned that the lack of timely data, caused by the U.S. government shutdown, could make future decisions more difficult. That tempered rate-cut expectations, especially for the December 10 meeting.

The CME FedWatch Tool shows a 67.8% probability of no rate change at the Fed’s December meeting. This represents a significant increase from the 9.1% probability seen before the announcement. As a result, the U.S. Dollar rebounded sharply, limiting gold’s earlier advance. The renewed Dollar strength and reduced policy easing expectations continue to cap gold’s short-term momentum.

Meanwhile, markets are now closely monitoring progress in U.S.–China trade negotiations. Both sides have reported incremental progress in recent discussions, including on fentanyl controls and export regulations. However, the lack of a formal agreement leaves markets vulnerable to sudden risk reversals. If talks stall, gold could regain its safe-haven appeal.  Conversely, meaningful progress could weaken gold interest as capital shifts toward equities. This ongoing uncertainty continues to anchor gold near critical levels.

Gold Faces Key Technical Resistance after Multi-Decade Breakout
 

The gold chart below shows a historic breakout above a long-standing trendline that connects the 1980 and 2011 peaks. This green resistance line served as a major ceiling for more than four decades. Gold successfully breached the trendline, but momentum has faded as price consolidates just above former resistance.
 

Meanwhile, a second red resistance zone marks the 2011–2025 range, where gold repeatedly struggled to maintain upward momentum. Following a strong rally in 2024 and 2025, price has once again reached the upper boundary of this area. Notably, the orange circle on the chart highlights the ongoing struggle at this critical inflection point. Despite strong bullish momentum, a decisive close above this zone is still needed to confirm a sustained breakout.

Additionally, the chart features a green trendline that spans multiple market cycles, reflecting long-term structural development. This former resistance line has now flipped into a durable support zone. Gold’s earlier test and rebound from this trendline strengthened confidence in the broader bullish setup. However, without a decisive breakout above the red resistance zone, the current rally remains exposed to potential pullbacks.

Conclusion: Gold Remains at a Crossroads near Structural Resistance
 

Gold continues to trade near a critical resistance zone, where both macro forces and technical barriers converge. The Fed’s cautious stance and a stronger Dollar are limiting immediate upside, while ongoing U.S.–China trade talks add another layer of uncertainty. Until gold delivers a decisive breakout, price action will remain sensitive to policy shifts, geopolitical headlines, and broader market sentiment.

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