Market Recap
Gold prices fell sharply on Tuesday as the US dollar hit a three-month high and traders scaled back expectations of another Fed rate cut in December. The ongoing US government shutdown, now the longest in history, further fueled market caution and left investors looking to alternative data sources for economic signals. Meanwhile, oil prices slipped, pressured by a stronger dollar and growing concerns about global demand.
Gold
Spot gold slid close to 2%, settling near $3,940 per ounce, while US December gold futures fell 1.3% to $3,960.50. The dollar index’s climb was the main driver behind the decline, as traders pared bets that the Fed would deliver another rate cut before year-end.
Fed Chair Jerome Powell’s recent comments hinting that last week’s rate cut may be the final one of 2025 also weighed on sentiment. Market-implied odds for a December cut dropped from over 90% to about 71% in just a week.
With the government shutdown halting key economic reports, traders are now watching the ADP private employment data for clues on economic health. Analysts note the absence of official data is leaving markets directionless in the short term.
Technical Outlook:
Gold remains in a weak consolidation phase. The $4,000 level continues to act as a strong resistance zone after multiple failed retests, while $3,915–$3,885 forms key support. The 4-hour chart shows bearish momentum dominating, though a rebound from near-term lows remains possible if buyers defend support levels.
Trading Plan:
- Strategy: Sell on rebounds, buy near dips.
- Resistance: $3,970–$4,000
- Support: $3,910–$3,880
Oil
Oil prices declined as a stronger dollar and weak manufacturing data stoked concerns about future demand. Brent crude fell 0.7% to $64.44 per barrel, while WTI lost 0.8%, closing at $60.56.
Analysts pointed to a combination of a firm dollar, the US shutdown, and Wall Street weakness as drivers of the day’s risk-off sentiment. On the supply side, OPEC+ confirmed plans to pause output hikes in Q1 2026, signaling growing caution about oversupply.
Technical Outlook:
Oil continues to trade within a broad sideways range, showing short-term weakness after failing to extend gains. The MACD indicator signals waning bearish pressure, while overall momentum remains neutral to mildly bullish in the medium term.
Trading Plan:
- Strategy: Buy on dips, sell near resistance.
- Resistance: $61.5–$62.5
- Support: $59.0–$58.0
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