The dollar index fell to its lowest since November 12, providing temporary support for gold. However, the dollar is still poised to end November 2% higher, buoyed by expectations of prolonged higher US interest rates following Donald Trump’s election victory. Gold’s appeal as a non-yielding asset tends to wane in a high interest rate environment, which has contributed to its 3% decline so far this month.
Geopolitical factors remain a mixed bag for the safe haven. While ceasefire talks in the Middle East have eased concerns somewhat, ongoing tensions in Russia and Ukraine continue to provide a floor for gold prices. On Thursday, Russia launched a significant attack on Ukraine’s energy infrastructure, leaving geopolitical uncertainty high.
Investors are looking ahead to US economic data
Market participants are closely watching next week’s U.S. economic data, including the highly anticipated jobs report, for clues about the Federal Reserve’s monetary policy outlook. These indicators could influence gold prices by shaping expectations for the Fed’s next rate hike.
Gold market forecast
Gold is likely to remain within the range in the near term, with resistance at $2,669.53 and support at $2,605.31. A weaker dollar or an escalation of geopolitical tensions could push prices higher, but the strong dollar and rising interest rate expectations could limit upside potential. The outlook for gold remains cautiously bearish as traders weigh economic data and policy signals against geopolitical risks.
More information in our Economic Calendar.