Today, gold is completely tethered to the Federal Reserve's (Fed) outlook and its ripple effects on the US dollar.
American interest rates. Hopes for new monetary easing in December have been keeping bullion afloat. Anyway, whispers that the regulator might just hit "pause" instead have caused a small dip. Honestly, the Fed's next call is what's really going to move the needle.
Central bank and investor demand. Let's not forget—regulators and major players have been steady buyers all year. This has put a real floor under the market.
Geopolitical risks. No doubt there's still enough turmoil out there to keep gold on the radar as a safe-haven, but such a bid hasn't been as strong lately.
US dollar exchange rate. If the Fed surprises everyone and turns hawkish, a greenback gaining ground would be bad news for the metal, making it pricier for everyone holding other currencies.
The overall mood in the gold market is still optimistic, but traders can feel the caution up in the air due to the central bank's "wait-and-see" stance. According to CME Group, the majority of analysts are still betting on a December rate cut, and that's what's fueling the positive sentiment. However, if the Fed's pause continues, this bullish positioning will start to unwind.
Option levels. Keep an eye on the $4,000–$4,200 range—that's where some key option strikes are sitting. These thresholds often act like magnets, either supporting the price or creating a wall of resistance.
From a technical standpoint, gold still has open gaps to fill at $4,200 and $4,230, and the price is likely to drift toward these levels. A good strategy would be to look for selloffs once these gaps have closed.
The overall recommendation is to sell gold at $4,200. Lock in profits at $4,150. Set Stop loss at $4,250.
Always size the position so that your potential loss (protected by a Stop Loss) is no more than 1% of your account balance. If you can't open a position that meets such a risk criteria, it's safer to skip this trade and wait for a better, lower-risk opportunity.
This content is for informational purposes only and is not intended to be investing advice.
