Gold hits a high of $4,247 before entering a correction phase... Support levels that gold investors should watch

Dollar rebound stalls the rally in gold, but downside resistance remains strong

This week, the gold market(XAU/USD) experienced significant volatility. It rose to a weekly high of $4,247 per ounce in early Thursday Asian trading, but afterward, as the dollar attempted a technical rebound from its lowest point since October 24, gold prices entered a correction phase. Currently, prices are stabilizing around $4,200.

While there were positive signals from the Fed’s rate cut, market uncertainty is triggering short-term profit-taking. Concerns about the future direction of the Fed’s monetary policy are also shaking investor confidence in gold.

The duality of Fed policy… lingering unease after rate cuts

At the last meeting, the Fed cut the federal funds rate by 25bp, but the dot plot limited additional cuts to just one more in 2026. The decision process revealed two hawkish dissenters, raising concerns about the pace of future monetary easing.

Chair Jerome Powell stated in a press conference that “the labor market remains exposed to downside risks,” expressing worries about excessive tightening, which temporarily weakened the dollar and boosted gold prices. However, the lack of clear guidance on future rate cuts is again putting the brakes on the gold market.

This uncertainty is creating a ‘downside rigidity(resistance to decline)’ in the gold market, according to experts.

Geopolitical tensions support the gold price floor

As risk appetite increases due to a rally in global stock markets, capital outflows from gold are occurring. However, geopolitical risks continue to sustain demand for gold as a safe haven.

Amidst stalled peace negotiations between Russia and Ukraine, reports emerged that Ukraine’s military launched drone attacks on Russian shadow fleet tankers in the Black Sea. President Putin reaffirmed his intention to secure the Donbas region, showing a hardline stance, which is heightening tensions.

These geopolitical tensions are acting as a key support factor preventing gold prices from easily falling below $4,200.

Technical milestones for gold investors

Current resistance zone: Over the past two weeks, gold has been trading within a range of $4,245–$4,250. A clear upward breakout of this level is necessary to resume the trend.

Bullish scenario: If gold clearly surpasses and stabilizes above $4,250, a rally toward $4,278 and eventually $4,300 is highly likely.

Correction scenario: If downward pressure persists:

• First buying opportunity: $4,170–$4,165 (buying on dips)
• Last line of defense: $4,125–$4,120

Below this zone, the 200-period exponential moving average and the upward trendline since late October converge, forming a strong support zone that could mark a mid-term trend turning point.

Key points for gold investors

In the short term, employment indicators such as the US weekly jobless claims released Thursday night will be critical in determining direction. Gold investors should watch for buying opportunities near $4,165 and monitor whether the $4,250 breakout occurs, while also paying close attention to any signals of further policy shifts from the Fed.