• Gold rises over 0.40% near $4,240 as traders price in a Fed rate cut next week.
• Rising ISM input prices and weak hiring highlight economic strain, reinforcing expectations for further Fed easing.
• China’s physical Gold demand softens at high prices, though technical momentum keeps $4,300 within reach.

Gold (XAU/USD) extends its gains for the second consecutive trading session on Monday, up over 0.40% as money markets priced in a rate cut by the Federal Reserve (Fed) in the next week. Meanwhile, the US Dollar weakness keeps the yellow metal underpinned at around $4,240 at the time of writing after reaching a five-week high of $4,264.

Bullion holds firm despite BoJ tightening risk, weaker Chinese physical demand

The yellow metal remains upward biased, but central bank tightening, particularly from the Bank of Japan (BoJ) following comments from Governor Kazuo Ueda, and a split Federal Open Market Committee (FOMC) are the main risks for bullion’s advance. Despite this, last week, Gold rallied over 3.75% and seems poised to challenge the $4,300 toward year’s end.

Data-wise, the Institute for Supply Management (ISM) revealed that manufacturing activity in November contracted for the ninth consecutive month. Further data, revealed by the ISM, showed that input prices are rising and that the labor market continues in a low-firing, low-hiring environment.

Meanwhile, physical demand for Gold in China has deterred buyers due to high prices, leading to hundreds of store closures, according to the Financial Times.

Ahead of this week, the US economic docket will feature the ADP Employment Change, the ISM Services PMI, Initial Jobless Claims and the Fed’s preferred inflation gauge release, the Core PCE.

Daily market movers: Expectations for dovish Fed, to underpin Gold prices

• The US Dollar Index (DXY), which tracks the buck’s performance versus six currencies, is down 0.16% at 99.31. At the same time, US Treasury yields are soaring, with the 10-year US Treasury note yield up seven basis points to 4.092%. US real yields, which correlate inversely to Gold prices, are surging by nearly seven and a half basis points to 1.862%.
• Expectations that the Federal Reserve would continue its easing cycle increased as the CME FedWatch Tool showed that odds for a 25-basis-point rate cut in December are at 87.4%, up from 86% last Friday.
• Rumors suggest that the White House National Economic Adviser Kevin Hassett could be appointed as the next Fed Chair succeeding Jerome Powell. Nevertheless, US President Donald Trump said on Sunday that he won’t tell anyone who will be but that he already made his pick. He added ,“We’ll be announcing it.”
• The ISM Manufacturing PMI softened to 48.2 in November from 48.7 in October, marking the ninth consecutive month in contraction territory. The employment sub-index fell deeper into contraction, sliding from 46 to 44, while the Prices Paid component rose to 58.5 from 58, slightly below expectations of 59.5.
• Traders should be aware that a possible solution to the Russia-Ukraine conflict led by the White House could cap bullion’s advance amid an obvious sentiment shift.

Technical analysis: Gold climbs steadily above $4,200

Gold price extended its advance after decisively clearing the $4,200 barrier, positioning XAU/USD to test the November 13 high at $4,245, followed by the $4,250 region. Momentum supports the bullish outlook, with the Relative Strength Index (RSI) trending higher and signaling scope for further upside.

The brief break above $4,250 opens the door for a move toward $4,300. Once above that level, the next resistance is the all-time high at $4,381. On the downside, a drop back below $4,200 would expose initial support at the November 25 low of $4,109, followed by the 20-day Simple Moving Average (SMA) at $4,089.