Freshly released US inflation data show headline CPI for November was expected to rise 3.1% year-on-year (annualized), but came in at 2.7%. Core CPI was expected at 3.0% and actually printed at 2.6%. Both figures undershot expectations, easing market concerns about persistent inflation and removing part of the obstacle to future rate cuts.
Gold is currently trading in an upward but choppy consolidation pattern. Mild expectations for further monetary easing by the Fed into 2026, together with rising geopolitical risks, are providing moderate support to gold prices. At the same time, Fed Governor Waller struck a dovish tone, saying that if disinflation continues, gradual policy easing could begin; in contrast, Atlanta Fed President Bostic called for patience and warned against cutting rates too early.
This divergence within the Fed makes the CPI print a decisive factor in judging the policy path. With inflation proving less sticky than feared, markets may further increase their rate-cut bets, which would be supportive for gold and weigh on the Dollar.
The delayed nonfarm payrolls report released on Tuesday showed the US added 64,000 jobs in November, slightly above the 50,000 consensus, and reversing the sharp loss of 105,000 jobs in October (revised lower due to the government shutdown). In addition, August–September figures were revised down by a combined 33,000. More importantly, the unemployment rate climbed to 4.6%, the highest since September 2021, while wage growth moderated, confirming that the labor market continues to cool.
These numbers echo Fed Chair Powell’s earlier warning that employment gains since April may have been overstated by about 60,000 jobs, and they significantly strengthen expectations for a more accommodative Fed. Markets have now priced in two rate cuts next year.
Initial and continuing jobless claims released on Thursday were expected at 225,000 and 1.93 million respectively, but came in slightly lower at 224,000 and 1.897 million. At the same time, the December Philadelphia Fed Manufacturing Index fell sharply below expectations. Together, these indicators describe an environment where firms are starting fewer new projects but also avoiding large-scale layoffs — broadly consistent with the picture painted by earlier data.
Because the unemployment rate is a key negative term in equations used to estimate the neutral interest rate, its rise increases the scope for the neutral rate to move lower.
In addition, persistent geopolitical uncertainty and year-end tightening in market liquidity are helping gold reassert its role as a portfolio stabilizer. Its performance has moved back to the forefront of major assets, making it a core choice for defensive allocation.
Market Analysis:
On the 4-hour chart, gold is rebounding in a choppy fashion, with MACD lines and histogram hovering above the zero line. Overall, gold is currently caught in a tug-of-war between rate-cut expectations + geopolitical support on one side and Dollar rebounds + internal Fed policy divisions on the other. In the short term, prices are likely to remain in a consolidation range, but the broader long-term bullish trend remains intact.
