Table of Contents

Introduction: The 4.4% Gold Rally and Key Drivers.

Weekly Data Summary: US Data Releases & Price Reactions (JOLTS, FOMC, Claims).

Macro Factors: Dovish Fed and Labor Weakness.

Daily Recap: Price Action from Monday to Friday.

The Outlook: Key Support/Resistance and Next Week's Catalysts.

Introduction: The Week Gold Broke Free

This week will be etched in the memory of precious metal traders. Gold (XAU/USD) delivered a monumental performance, staging an explosive rally that pushed the price up by nearly 4.4% from its low. The metal bottomed out near $4,170/ounce on Tuesday before carving a decisive path higher to flirt with near all-time highs at $4,354/ounce by Friday.

The primary driver was a clear pivot in the market's perception of the US economic landscape, fueled by a key Federal Reserve decision and emerging signs of a cooling labor market. For Gold, this confluence of a dovish central bank and economic uncertainty created the perfect bullish storm.

Weekly Data & XAU/USD Price Action

Price Dynamics Summary:

• Weekly Low: $4,170/ounce (Tuesday Asian Session)
• Weekly High: $4,354/ounce (Friday Intraday)
• Total Percentage Gain: 4.4%
• Total Pip Gain: $\sim2,000$ Pips

Macro Factors: The Core Drivers

The week's economic calendar provided two major catalysts that fundamentally shifted the outlook for XAU/USD:

1. Dovish Fed Pivot: The Federal Reserve's decision to cut the interest rate by 25 bps was expected, but Chairman Powell's rhetoric was interpreted as significantly more dovish. This increased the market's confidence in future rate cuts in 2026, which directly lowers the opportunity cost of holding non-yielding Gold.
2. Labor Market Weakness: The combined JOLTS data and the significant surge in Initial Jobless Claims (to 236,000) confirmed that the US labor market is finally cooling. This economic cooling provides the Fed with the necessary justification to maintain its current easing bias.
3. US Dollar and Yields: The dovish Fed and weak data led to an immediate decline in the US Dollar Index (DXY) and a drop in real Treasury Yields. This correlation is highly supportive of Gold, as a weaker USD makes Gold cheaper for international buyers.

Market Dynamics: The Breakout Move

The technical price action saw XAU/USD transition from consolidation to a high-momentum breakout:

• Key Support Held: The $4,170 low established a powerful support base early in the week.
• Resistance Breached: The metal decisively broke above the psychological $4,270/ounce barrier following the FOMC and Jobless Claims data.
• Flows: The rally was driven by a strong combination of short-covering (traders unwinding bearish positions) and fresh institutional buying, confirming the belief that the easing cycle is underway.

The Outlook: Technicals, Support, and Resistance

The market dynamics of the past week have established a new, higher baseline for XAU/USD. The focus now shifts to maintaining the break above key psychological levels and challenging the all-time high of approximately $4,381/ounce.

Wednesday: Powell's Dovish Rate Cut Ignites the Rally

• US Data: FOMC Interest Rate Decision & Press Conference (Powell)
• Key Event: The Federal Reserve delivered the widely anticipated 25 basis point (bps) interest rate cut, moving the target range to 3.50%-3.75%. This was the third successive cut, confirming the central bank's shift from a tightening to an easing cycle.
• The Powell Pivot: While the cut itself was priced in, the subsequent language from Chairman Powell and the Summary of Economic Projections (SEP) proved to be the rocket fuel for gold. Despite a divided committee and internal disagreements, the overall messaging was read by the market as significantly more dovish than previously anticipated.
  • Powell indicated that the central bank is "well-positioned to wait and see," and crucially, the door for additional rate cuts in 2026 was kept wide open, even if the Fed's dot plot showed internal caution.

• Gold’s Reaction: The combination of a lower official rate and increased confidence in future easing sent gold soaring. The metal punched decisively through key resistance levels, confirming the bullish breakout. The post-FOMC session saw gold rally strongly past the $4,220/ounce level, establishing a new higher base for the remainder of the week.

Thursday: Initial Jobless Claims Reinforce the Bullish Case

• US Data: Initial Jobless Claims (for the week ending December 6)
• The Surprise: On Thursday, the labor market weakness was unequivocally confirmed. Initial Jobless Claims jumped significantly to 236,000, markedly higher than the consensus forecast of 220,000 and representing the largest increase since the early days of the pandemic.

• Gold’s Reaction: This was a textbook "bad news is good news for gold" scenario. A notable surge in unemployment claims signals economic cooling, providing the Fed with further ammunition to justify a faster-than-expected rate-cutting cycle in 2026. This data release poured fuel onto the dovish fire lit by Powell, leading to immediate US Dollar weakness and a sharp intraday surge in gold. The metal successfully broke through the crucial $4,270/ounce psychological and technical barrier, extending its rally dramatically.

Friday: The Peak and the Plunge

• US Data: No significant scheduled data release.

Friday started as a continuation of the bullish momentum. Speculative and institutional flows chased the market higher, driving XAU/USD toward the psychologically important $4,350/ounce level. The price hit a staggering intraday high of $4,354/ounce, marking a gain of nearly 2,000 pips (4.4%) from the Tuesday low of $4,170.

The Sharp Reversal: Profit-Taking Takes Hold

However, the euphoria was short-lived. Upon testing the highs in the $4,300-$4,350 resistance zone, the metal encountered heavy intraday profit-taking.

In a single, sharp session, Gold experienced a brutal sell-off:

• Drop Magnitude: The price fell by approximately 1,000 pips, translating to a -2.2% decline from the peak.
• The Technical Test: This massive sell-off effectively re-tested the entire week's breakout move, dragging the price back toward the lower end of the daily range.
• Close: XAU/USD ultimately closed near $4,299/ounce, well off its highs, demonstrating buyer exhaustion and profit-taking after the rapid rally.

What's Next for Traders?

The question is no longer if Gold will re-test the all-time high, but when. As we head into next week, all eyes will be on the follow-through, particularly how the market reacts to the upcoming November Jobs Report. A continued weakening of US employment figures will only strengthen the case for a rapid push toward the $4,400/ounce and potentially higher.