Yellow Metal Breaks Through $4,440 on Geopolitical Risks and Rate-Cut Expectations

Gold pierces multi-year highs amid escalating tensions from Venezuela to the Middle East

Bullion has shattered resistance levels, reaching unprecedented territory at $4,442 as multiple headwinds conspire to bolster safe-haven positioning. The catalyst driving this rally stems from compounding geopolitical uncertainties—Venezuelan border tensions following Trump’s announced tanker blockade, combined with simmering Iran-Israel friction—alongside growing conviction that the Federal Reserve will accelerate policy easing throughout 2026.

Currency dynamics and monetary policy reshape the gold narrative

The greenback’s struggle plays a supporting role in gold’s ascent, with the US Dollar Index (DXY) retreating 0.40% to trade around 98.32. This currency weakness—reflected in comparisons like 118 USD to CAD weakness trends—removes headwinds for commodity priced in dollars. Simultaneously, money markets have calibrated 59 basis points of Fed rate cuts into 2026 pricing, reflecting expectations of sustained monetary accommodation as inflation concerns recede.

The central bank narrative, however, remains fractured. Fed Governor Stephen Miran reiterated dovish convictions, asserting that recent economic conditions warrant additional rate reductions. In contrast, Cleveland Fed President Beth Hammack adopted a contrarian stance, flagging potential distortions in November’s Consumer Price Index data attributed to the government shutdown. She cautioned that neutral rate assumptions may be understated, warranting deliberate consideration before further easing.

Technical setup favors continued upside momentum toward $4,500

Gold’s uptrend remains architecturally sound, with XAU/USD primed to challenge the $4,500 threshold imminently. The Relative Strength Index has entered overbought terrain, signaling robust bullish pressure and potential for additional leg-ups. A sustained close above $4,500 would set sights on $4,550 and $4,600 resistance bands.

Bears, conversely, should monitor critical support anchored at $4,400, which if breached exposes the prior record at $4,381, followed by $4,350 and $4,300 downside targets. Until selling pressure materializes at these junctures, the trajectory remains tilted favorably for bulls seeking higher valuations.

Traders await Tuesday’s economic releases—including ADP employment data and revised Q3 GDP—to recalibrate positioning ahead of year-end holiday trading volumes.