Gold prices maintain strong support levels amid short-term corrections… What about the safe-haven demand from stock swing investors?

Geopolitical uncertainties and expectations for monetary policy easing are conflicting, and gold prices are holding steady. On Thursday during Asian hours, profit-taking sales emerged, leading to a slight decline, but the dovish stance of the Federal Reserve has driven the dollar weak, limiting the downside.

Mixed Economic Indicators, but Stronger Signals for Fed Rate Cuts

This week’s US economic data sent mixed signals. According to Census Bureau data, September durable goods new orders increased by 0.5% month-over-month, surpassing market expectations of 0.3%. However, orders excluding defense rose only 0.1% after a sharp increase the previous month, indicating potential economic slowdown.

Initial jobless claims totaled 216,000, reaching a nearly 7-month low, suggesting a stable labor market. Conversely, the November Chicago Purchasing Managers’ Index (PMI) came in at 36.3, well below expectations, reigniting concerns over economic slowdown.

Despite these mixed signals, markets are strongly pricing in the possibility of additional rate cuts by the Fed. New York Fed President John Williams mentioned, “There is room to cut rates without compromising price stability,” while Director Christopher Waller stated, “A slowdown in employment justifies a 25 basis point cut in December.” These expectations for monetary easing are weakening the dollar and supporting gold prices.

Geopolitical Risks Easing vs. Safe-Haven Appeal

As hopes for peace negotiations between Russia and Ukraine rise, risk appetite is reviving. US President Donald Trump mentioned that an agreement is “very imminent,” but Kremlin spokesperson Dmitry Peskov said, “There is still a long way to go, and no unilateral concessions will be made.”

In this uncertain peace process, the market is balancing between profit-taking by stock swing traders and low-cost buying strategies. While risk appetite in global equities limits the upside for gold, the market participants are mostly looking for buying opportunities during corrections, as full risk resolution has not yet occurred.

Technical Perspective: $4,040 as a Key Breakpoint

If gold prices undergo further correction, the first support level is around $4,130–4,132. Breaking below this range could accelerate selling pressure, potentially testing $4,100.

A more critical technical level is around $4,040. This zone coincides with the 200-period exponential moving average (EMA) on the 4-hour chart and the upward trendline from late October lows, forming a strong support zone. If this level is broken, the short-term trend could shift from bullish to bearish, with the potential for a decline toward the psychological support at $4,000.

On the upside, the previous two-week high of $4,171–4,173 will act as the first resistance. If daily closing prices break above and stabilize above this range, market focus will shift to the key psychological resistance at $4,200. A sustained move above $4,200 could set the next target at the monthly swing high of $4,245.

Overall Assessment: Fundamentals Still Favorable

The current fundamental environment supports a gradual upward trend in gold prices. As long as the Fed’s outlook for further rate cuts and dollar weakness persist, there is a high likelihood of buying interest at the $4,130 and $4,040 levels. Additionally, the demand for portfolio diversification among stock swing traders could further channel funds into safe-haven assets like gold.