• Gold climbs to a six-week high as risk-off sentiment boosts safe-haven demand.
• US Dollar weakens toward two-week lows, offering additional support to XAU/USD.
• Technical setup stays bullish after breakout above the symmetrical triangle pattern.

Gold (XAU/USD) kicks off the new month on a firm footing, climbing to its highest level since October 21 on Monday, as risk-off sentiment underpins safe-haven demand, while traders gear up for another interest rate cut by the Federal Reserve (Fed) at its December 9-10 monetary policy meeting.

At the time of writing, XAU/USD is trading around $4,260, putting the metal on track for its best annual performance since 1979. Prices are up nearly 60% so far this year, supported by strong central bank demand, robust ETF inflows, persistent geopolitical tensions and the prospect of lower interest rates in the United States (US).

Investors now turn their attention to key US economic data releases this week, which could influence interest rate cut expectations. Markets are already pricing in around an 87% probability of a 25-basis-point (bps) reduction at next week’s meeting, following dovish-leaning remarks from several policymakers and softer US data last week.
 

Market movers: Risk-off mood, Fed outlook steer markets

• A dovish Fed outlook continues to weigh on the US Dollar (USD), offering further upside for Gold by making the metal more affordable for overseas buyers. The US Dollar Index (DXY), which measures the Greenback’s value against a basket of six major currencies, is trading around 99.09, hovering near two-week lows.
• Global equities came under pressure on Monday as risk aversion gripped markets at the start of December. In the US, investors turned cautious ahead of key economic data and the December 9-10 Fed meeting. Asian markets, particularly Japan, were weighed down by hawkish comments from the Bank of Japan (BoJ) Governor Kazuo Ueda. In China, the RatingDog General Manufacturing Purchasing Managers Index (PMI) fell to 49.9 in November, its lowest level since July, adding to the cautious tone. Meanwhile, a selloff in cryptocurrencies also contributed to the broader risk-off environment.
• Markets are also watching a possible Fed leadership change after US President Donald Trump said on Sunday, “I know who I am going to pick, yeah. We’ll be announcing it.” Reports indicate Kevin Hassett is the leading candidate to replace Jerome Powell, fuelling expectations of a more dovish policy path given his prior advocacy for interest-rate cuts.
• On the geopolitical front, attention is on Russia-Ukraine peace talks after four-hour negotiations concluded in Florida over the weekend. US and Ukrainian officials described the session as “difficult but productive.” The US negotiator, Steve Witkoff, is expected to travel to Moscow today for follow-up talks and could meet President Vladimir Putin on Tuesday.
• The US economic calendar features the ISM Manufacturing PMI later on Monday, with consensus expecting the index to hold in contraction territory at 48.6 compared with 48.7 in October. In the week ahead, the spotlight shifts to the Personal Consumption Expenditures (PCE) report due on Friday.
   

Technical analysis: XAU/USD maintains bullish bias after triangle breakout
 

(Click on image to enlarge)

On the 4-hour chart, Gold has confirmed a successful breakout above a well-defined symmetrical triangle pattern, signalling a bullish continuation structure. The breakout shows improving momentum, although follow-through buying remains limited for now as the Relative Strength Index (RSI) holds in overbought territory near 77.

This is keeping prices somewhat capped, with XAU/USD oscillating inside the previous supply zone between $4,250 and $4,270. A clean move above this zone would strengthen bullish conviction and open the door for a retest of the all-time high near $4,381.

On the downside, initial support is aligned at the 21-period Simple Moving Average (SMA) near $4,187, followed by the upper boundary of the broken triangle pattern.

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