As NASDAQ 100 plunges and December hike bets retreat, gold surges above $4,100

Gold rises 1% to trade above $4,100 while NASDAQ 100 slumps 5.9%.
A six-basis-point decline takes US 10-year Treasury yields to 4.829%.
Ahead of NFP, the probability of a December Fed rate hike drops from 82% to 66%.

Gold (XAU/USD) is trading above $4,100 on Thursday, gaining around 1% as the Greenback softens despite robust US data and hawkish remarks from Federal Reserve (Fed) officials. The advance follows a rebound from the day's low of $4,057.

Are the tech rout and lower Treasury yields supporting bullion?

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Investors shifted from technology shares towards defensive stocks as risk sentiment deteriorated, sending the NASDAQ100 down nearly 5.9% in a sharp sell-off. Following the Democrats' landslide victory in the US midterm elections, the other two US indices also suffered steep losses: the Dow Jones declined 2.9%, while the S&P 500 dropped 3.8%.

Having rebounded from an intraday low of 101.19, the US Dollar Index (DXY) stands almost flat at 101.46. The index measures the Greenback against a basket of six currencies.

Firm US employment data could offer an indication of what Friday's Nonfarm Payrolls report may show. For the week ended October 31, Initial Jobless Claims fell to 189K from 195K, coming in below the 196K forecast. In an earlier release, Challenger, Grey and Christmas said October job cuts rose just 2% to 43,994 from 43,281, noting that the increase in inflation is minimal. Companies also announced plans last month to recruit over 444,692 workers, a 57% increase over the 2025 figures.

Comments from Federal Reserve (Fed) officials also drew attention. Beth Hammack, President of the Cleveland Fed, favours raising rates gradually and said the Fed has further work to do. Thomas Barkin, President of the Richmond Fed, similarly backed a gradual approach, saying “broad-based” inflation is still too high.

Lower inflation expectations, as Oil prices pull back from their pre-election highs, are meanwhile weighing on US Treasury yields. The yield on the US 10-year Treasury note has declined six basis points to 4.829%.

Traders have consequently continued to scale back hawkish bets. CME's FedWatch Tool puts the probability of a 25-basis-point Fed rate increase at the December meeting at 66%, compared with 82% a day earlier.

Attention among Gold traders is now on October's Nonfarm Payrolls (NFP) release. Payroll gains are expected to increase from the previous month's 29K to 65K, while the Unemployment Rate is forecast to remain at 2.9%.

XAU/USD technical outlook: Can Gold build on its advance above $4,100?

Having regained the psychological $4,100 level, Gold is breaking above an important resistance trendline at the time of writing. The Relative Strength Index (RSI) has turned bullish, signalling upward momentum that could allow prices to rise further.

The broader market structure nevertheless continues to favour the downside for XAU/USD. A recovery above the confluence of the 100-day and 50-day Simple Moving Averages (SMAs), at $4,203 and $4,205 respectively, could enable buyers to test $4,300. Beyond that level, the 200-day SMA at $4,468 would come into view.

A resumption of the decline requires Gold to break below $4,100. Should prices then fall through $4,000, attention would turn to the November 4 daily low of $3,919. Further support for buyers lies at the October 30 year-to-date low of $3,879, followed by $3,500, the daily high recorded on 22 April 2025 that has since become support.

Common questions about Gold

What attracts investors to Gold?

Throughout human history, Gold has served extensively as both a store of value and a medium of exchange. Today, its appeal extends beyond its lustre and use in jewellery: investors widely regard the precious metal as a safe-haven asset, or an investment suited to periods of uncertainty. Because it is not dependent on a particular issuer or government, Gold is also commonly viewed as protection against inflation and currency depreciation.

Which buyers hold the most Gold?

The largest holders of Gold are central banks. To support their currencies during unsettled periods, they often diversify reserves by purchasing Gold, strengthening perceptions of their economies and currencies. Substantial Gold reserves can bolster confidence in a country's solvency. World Gold Council data show that central banks increased their reserves by 1,136 tonnes in 2022, with those purchases worth around $70 billion. No higher annual purchase has been recorded since records began. Emerging-economy central banks, including those in China, India and Turkey, are rapidly building their Gold reserves.

How does Gold move relative to other assets?

An inverse relationship links Gold with the US Dollar and US Treasuries, both of which are important reserve and safe-haven assets. A weaker Dollar generally supports Gold, allowing central banks and investors to diversify holdings during turbulent periods. Risk assets also tend to move in the opposite direction to Gold: stock-market rallies usually put pressure on the metal, whereas sell-offs in riskier markets typically support it.

Which factors influence Gold prices?

Many different forces can influence Gold prices. Its safe-haven appeal means that geopolitical instability or concerns about a severe recession can drive rapid gains. Since Gold offers no yield, lower interest rates generally support it, while a higher cost of money usually puts the metal under pressure. Most price movements, however, hinge on the performance of the US Dollar (USD), as Gold is quoted in dollars (XAU/USD). Dollar strength tends to restrain Gold prices, while a weaker Dollar is likely to lift them.