Maxco Futures — Gold prices slipped on Tuesday’s trading, weighed down by profit-taking after rallying to a six-week high in the previous session. Market sentiment has turned cautious ahead of a series of key U.S. economic data releases and strong expectations that the Federal Reserve will begin cutting interest rates soon.
Gold Drops on Profit-Taking
Spot gold fell around 0.3% after a sharp gain earlier that encouraged investors to secure short-term profits. Selling pressure emerged as U.S. Treasury yields climbed again, offering more attractive interest-bearing alternatives compared to gold.
Markets Await the Fed’s Next Move
Despite the pullback, gold remains fundamentally supported by strong expectations of a Fed rate cut. Market participants currently see a very high probability of a 25-basis-point reduction at the upcoming FOMC meeting, based on money market pricing and swap contracts. This outlook keeps gold’s bullish sentiment intact, as lower interest rates typically reduce dollar yields and enhance the appeal of non-yielding assets like gold.
Key U.S. Data to Drive Next Direction
Investors are now awaiting several major U.S. economic indicators, including:
- ADP Employment Report
- PCE Price Index — the Fed’s preferred inflation gauge
- Nonfarm Payrolls (NFP) later this week
Any results weaker than expected could strengthen the case for a rate cut and potentially push gold higher. Conversely, stronger-than-expected data may pressure gold in the short term.
Medium-Term Outlook Remains Bullish
The broader medium-term trend for gold is still viewed as positive, driven by:
- expectations of global monetary easing,
- weakening momentum in the U.S. dollar,
- potential economic slowdown, and
- persistent geopolitical uncertainties.
Some projections even suggest that gold could reach new record highs in early 2026 if the Fed formally enters a rate-cutting cycle.
Today’s correction appears mainly driven by profit-taking after last week’s strong rally. With the market heavily leaning toward expectations of Fed rate cuts, the medium-term outlook for gold remains tilted to the upside. Upcoming U.S. economic data will act as the key catalyst — either extending the rally or deepening the short-term correction.
Intraday Technical Outlook
On the H1 timeframe, gold still shows limited upside potential, with resistance seen around 4235–4238, which may serve as an area for renewed selling interest. The risk boundary appears around 4246, the next intraday resistance level.
Should U.S. fundamental data come in stronger than expected, gold may move back toward the 4160–4140 area.
Ade Yunus, ST WPA
Global Market Strategies