Price remains stable in the mid-$52 range amid selling pressure... "Waiting for December decision"

Sudden Weakening of the Strong Dollar Becomes a ‘Signal Shot’… Is the Rally Toward $85 Nearing Re-Start?

XAG/USD( on the spot) charted a correction during Thursday’s Asian session. Fluctuating around $52.80 per ounce, the three-day consecutive rally is taking a breather. Although profit-taking sell-offs emerged due to the sharp rise, the decline itself is limited. This is because speculators see this as a simple correction phase.

Profit-taking vs. Accumulation at Low Prices… ‘Quiet Tension’ in the Market

The drop below $53 is a short-term overheat phenomenon. However, market participants’ reactions are calm. Each incoming sell order is met with waiting buy-side support, indicating a strong underlying bullish expectation.

This is interpreted as a technical adjustment ahead of the December Federal Open Market Committee( (FOMC)). As bets on Fed rate cuts intensify, the selling pressure is limited to merely securing profits. The prevailing view is that the potential for upside remains greater than downward pressure.

“Even if Employment Data Is Strong… the Fed Will Continue to Pump Money”

The U.S. Department of Labor reported 216,000 new unemployment claims last week, significantly below the expected( 225,000). The four-week moving average also fell to 223,750, indicating a resilient labor market. Durable goods orders also remained strong.

Typically, such positive indicators should signal tightening. However, market reactions are the opposite. According to CME FedWatch, the probability of a 25bp rate cut in December exceeds 84%. Compared to just a week ago, when it was around 30%, this indicates a rapid shift in market sentiment toward ‘cutting.’

This reflects the Fed’s intention to respond preemptively to economic slowdown. Despite strong data, there is a growing conviction that rates will ultimately be lowered.

White House’s ‘Low-Interest’ Appointments… Pressure to Reevaluate the Dollar

The appointment of the next Fed Chair has emerged as another variable. It is reported that the Trump administration has included Kevin Hasset, Chair of the National Economic Council( (NEC)), as a final candidate. The market views Hasset as someone who will faithfully continue Trump’s ‘low-interest, weak-dollar’ policy stance.

This outlook alone has increased expectations that future monetary policy could turn out to be more aggressive and faster than initially anticipated. As a result, the dollar has come under pressure.

The dollar index( (DXY)), which measures the dollar’s value against six major currencies, has fallen for three consecutive trading days, dropping to around 99.50. A weaker dollar reduces the cost of buying gold for global investors. Coupled with the profit-seeking in non-dollar currencies, an environment is being created where international funds could flow into the gold market.

Ultimately, December’s decision will determine everything. The current correction is a natural part of the process. The market is watching the Fed with a fixed gaze, waiting to see when the next rally toward $85 will begin.