Gold continues scaling new weekly highs; eyes $4,050 as US sticks to elections-led losses
- Gold catches aggressive bets on Wednesday as the US election results drag the USD to late September lows.
- Sliding US bond yields further exert pressure on the Greenback, though geopolitical risks help limit losses.
- Fed rate hike bets might contribute to capping the upside for the bullion as traders await key US macro data.
Gold (XAU/USD) builds on its strong intraday move up, hitting a series of new weekly tops on Wednesday and climbing back close to the $4,050 level during the first half of the European session amid a broadly weaker US Dollar (USD). Democrats’ wins in the House and Senate raise the prospect of gridlock in Washington. Moreover, heightened political uncertainty drove investors to safe-haven assets, exerting some downward pressure on US bond yields. This, in turn, is seen weighing on the Greenback and supporting the precious metal.
However, hawkish US Federal Reserve (Fed) expectations fail to assist gold in building on the modest intraday uptick. According to the CME Group's FedWatch Tool, traders are currently assigning a nearly 80% chance that the US central bank will raise borrowing costs again at the next policy meeting in December. The bets were lifted by the Labor Department's Job Openings and Labor Turnover Survey, or the JOLTS report, on Tuesday, which showed that hiring held relatively steady in September. In fact, job openings rose to 7.523 million during the reported month. This comes on, up from August's upwardly revised reading of 7.190 million. This comes on top of resilient economic growth and persistent price pressures, and solidifies bets for an imminent Fed rate hike, keeping the non-yielding bullion below the $3,970 resistance zone.
Meanwhile, the geopolitical risk premium remains in play despite efforts for a diplomatic resolution to end the eight-month-old US-Iran war. In the latest developments, President Donald Trump told the Financial Times on Tuesday that the US has no immediate plans to strike Iran despite Israeli Prime Minister Benjamin Netanyahu hinting at an attack later this week. Meanwhile, a senior Iranian official told Reuters that the Strait of Hormuz will reopen only if sanctions are waived and the US naval blockade ends. Furthermore, Iran's Islamic Revolutionary Guard Corps (IRGC) said that four tankers were destroyed after striking mines south of the Strait of Hormuz. This fuels oil supply risks and inflation fears stemming from volatile energy prices, which underpin prospects for further Fed policy tightening.
Traders now look forward to Wednesday's US economic docket – featuring the release of the ADP report on private-sector employment and ISM Services PMI. Apart from this, the incoming geopolitical headlines could provide some impetus to gold. Meanwhile, the focus remains glued to the closely watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday, which will influence USD demand and determine the near-term trajectory for the precious metal. Nevertheless, the aforementioned fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the XAU/USD pair has bottomed out and positioning for an extension of the recovery move from the lowest level since September 2025, touched last Friday.
XAU/USD 4-hour chart
Technical Analysis
The XAU/USD maintains a bearish bias below the 100-period Simple Moving Average (SMA) on the 4-hour chart and all key Fibonacci retracement levels of the fall from the mid-October highs, with the 23.6% retracement at $3,947 acting as immediate overhead resistance ahead of the $3,970 zone. Meanwhile, the Relative Strength Index (RSI) at 48.94 sits near neutral while the Moving Average Convergence Divergence (MACD) remains positive at 6.65, hinting at some stabilizing momentum but not yet strong enough to challenge the prevailing downside structure.
In the meantime, a sustained strength beyond the $3,970 hurdle would expose the 38.2% level at $3,995 before the Gold price climbs to the 50.0% retracement at $4,033. Above these, the 100-period SMA at $4,057 and the 61.8% and 78.6% retracements at $4,072 and $4,127, respectively, precede the cycle high near $4,197. On the downside, the main structural support is seen at the Fibonacci anchor around $3,869, where buyers could attempt to reassert a floor if bearish pressure extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Nov 04, 2026 13:15
Frequency: Monthly
Consensus: 69K
Previous: 90K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
