Dollar and Gold in Flux Ahead of Fed Policy Decision

Key Takeaways:

*The resilient JOLTS report suggests underlying U.S. economic strength, but soft hiring and rising layoffs keep the greenback vulnerable to Fed easing expectations.

*Anticipation of rate cuts is already weighing on the dollar and boosting safe-haven assets like gold. Tomorrow’s FOMC is the key near-term catalyst.

*Spot gold has rebounded, reflecting positioning ahead of the Fed, weaker dollar flows, and geopolitical/fiscal risk such as U.S. interventions abroad.

Market Summary:

The U.S. dollar remains in a delicate balance as markets parse a mix of macroeconomic signals, political developments, and central-bank uncertainty. The recently released JOLTS Job Openings report showed 7.67 million positions in October shows a modest rise from prior months suggesting that the labour market remains relatively resilient, which tends to support dollar strength. At the same time, hiring has softened and layoffs ticked higher, raising doubts about how much underlying labour-market strength can sustain the greenback.

Against this backdrop, market pricing continues to reflect expectations of rate cuts by the Federal Reserve at its December meeting and possibly further easing next year. That dovish anticipation has weighed on the dollar, and the currency’s recent weakening has, in turn, provided some lift to risk assets and commodities, including gold. Spot gold recently rebounded above US$4,200/oz as traders positioned ahead of the Fed meeting, underscoring how sensitive bullion is to both U.S. monetary policy and dollar moves.

Beyond macroeconomic data, political and fiscal developments have added volatility. High-profile interventions such as the recent discussions between Donald Trump and Viktor Orbán on “financial cooperation,” including potential swap lines or credit facilities have drawn investor scrutiny. Such actions could influence the perceived risk of U.S. fiscal obligations and global political exposure, introducing additional uncertainty for the dollar. For gold, the same environment reinforces its role as a safe-haven hedge amid political and macroeconomic uncertainty.

Overall, the near-term trajectory of both the dollar and gold appears closely linked to the Fed. A dovish tilt or confirmation of rate cuts could further lift gold while pressuring the dollar, whereas any unexpectedly hawkish nuance or upward pressure on yields could support the greenback and trigger short-term retracement in bullion. Traders and investors are now looking intently at tomorrow’s FOMC for clarity on both policy direction and tone.

Technical Analysis 

DXY, H4: 

The dollar index is beginning to show early signs of recovery after forming a short-term base around the 99.05 support region. Price has pushed back above this zone and is now consolidating slightly below the 99.40 minor resistance. The recent candles show reduced selling momentum and steadier bullish attempts, suggesting buyers are gradually gaining confidence after a long downside stretch. 

RSI has climbed to the 58–60 range, indicating a shift into mildly bullish territory without yet entering overbought conditions, which means there is room for further upside if momentum continues. MACD has also printed a bullish crossover above the signal line, supported by growing green histogram bars, reinforcing the idea that bullish momentum is developing.

Resistance Levels: 99.70, 100.25
Support Levels: 99.00, 98.70

GOLD, H4: 

Gold on the chart is currently trading in a sideways consolidation phase, holding above the 4,210 support band while repeatedly failing to break decisively above the 4,260 resistance level. The recent structure shows a potential double-top–like pattern near 4,260, followed by a decline and a choppy recovery, indicating that bullish momentum has weakened compared with late November. Price action over the last few days has formed a mini lower-high sequence, suggesting sellers are defending the 4,260 region, but buyers are still showing interest around 4,180, keeping the market range-bound. 

RSI has bounced from the mid-40s toward 55, signaling mild bullish pressure but not yet any strong momentum shift. MACD remains flat and near the zero line, reflecting the lack of clear trend direction and reinforcing the current consolidation environment.

 Resistance Levels: 4260.00, 4315.00
Support Levels: 4210.00, 4180.00