In addition, the Commerce Department reported 2.8% year-over-year growth for the third quarter, driven by robust consumer spending, which rose 3.5%.
Labor market data also reflected resilience, with a slight decline in weekly unemployment claims. Durable goods orders in October, however, fell short of expectations, rising just 0.2% versus the forecast 0.5%. This mixed data reinforced market expectations of a cautious approach to rate cuts by the Federal Reserve.
Market Outlook: Fed and Fiscal Policy in Focus
Despite the strength of economic indicators, the market estimates a 70% probability of a Federal Reserve rate cut in December. However, uncertainties loom over fiscal policy, with speculation surrounding Treasury Secretary-designate Scott Bessent’s possible focus on controlling the budget deficit. Such measures could dampen the rise in government bond yields, providing limited relief for gold.
Geopolitical tensions, including the ongoing conflict between Russia and Ukraine and concerns over proposed tariffs, add further uncertainty. While these risks may provide some support to safe haven assets like gold, the strengthening dollar remains a significant headwind.
Gold’s near-term trajectory depends on policy signals from the Federal Reserve, economic data and geopolitical developments. Until the metal moves above critical resistance levels, bearish sentiment may persist, keeping prices under pressure.