Gold is back in the green above $4,200 early Wednesday, following a temporary pullback on Tuesday, as buyers refuse to give up heading into the top-tier US ADP Employment Change and US ISM Services PMI data releases.

Gold regains upside momentum, as key US data loom

The overnight weakness in the US Dollar (USD) extends into Asia, allowing Gold to gather upside traction.

The USD faces headwinds from expectations surrounding an imminent interest rate cut by the US Federal Reserve (Fed) next week, as well as from the latest chatter that the White House Economic Adviser Kevin Hassett is seen as President Donald Trump’s top pick to become the next Fed Chairman.  

On Tuesday, Trump said that he had narrowed the list down to one, and he later mentioned Hassett as a potential Chairman.

Hassett is known to be a relentless dove, and hence, this chatter seems to bode well for the non-yielding Gold at the expense of the USD.

Further, Gold also capitalizes on renewed geopolitical tensions surrounding the Russia-Ukraine peace talks and upbeat China’s RatingDog Services PMI data.

The Kremlin said on Wednesday that Russia and the US failed to reach a compromise on a possible peace deal to end the war in Ukraine after a five-hour Kremlin meeting between President Vladimir Putin and Donald Trump’s top envoys.

Putin’s top foreign policy aide, Yuri Ushakov, said, “compromises have not yet been found. “There is still a lot of work to be done,” Ushakov added.

Meanwhile, the RatingDog China General Services PMI, compiled by S&P Global, fell to 52.1 from 52.6 in October, marking the weakest expansion since June. The reading, however, surpassed expectations for a drop to 52. Note that China is the world’s top yellow metal consumer.

Looking ahead, the next leg higher in Gold hinges on the upcoming monthly US ADP Employment Change data and the ISM Services PMI, which could double down on the dovish Fed bets beyond the December monetary policy meeting.

Gold price technical analysis: Daily chart

In the daily chart, the 21-day Simple Moving Average (SMA) rises and sits above the 50-, 100-, and 200-day SMAs, while the longer averages also advance. Price holds above these averages, with the 21-day SMA at $4,117.64 offering nearby dynamic support. The Relative Strength Index (RSI) at 62.86 remains positive and edges higher, reinforcing upward momentum.

Measured from the $4,381.17 high to the $3,885.84 low, the 61.8% retracement at $4,191.95 has been surpassed, while the 78.6% retracement at $4,275.16 caps the next upside attempt. A sustained break above the latter would extend the advance, whereas a pullback below the former could slow momentum back toward the short-term average.

(The technical analysis of this story was written with the help of an AI tool)