Market Update
Gold held steady on Tuesday after briefly touching its highest level since November 14, supported by rising expectations that the Federal Reserve will cut rates in December. Markets now price an 85 percent probability of a December cut. Oil, meanwhile, extended its decline as Ukraine signaled openness to a US-proposed peace framework, sharpening concerns that a potential end to the war could bring Russian supply back to global markets.
Gold
Spot gold was little changed at 4,139.79 dollars per ounce after hitting a one-week high. Traders increasingly expect the Fed to cut rates in December, with odds climbing to 85 percent and becoming the main source of support for gold.
Soft U.S. data further boosted the case for easing. September retail sales grew slower than expected, and producer inflation was unchanged from August. These readings aligned with recent dovish comments from Fed officials. Fed Governor Milan said on Tuesday that further deterioration in the labor market would justify additional rate cuts.
Zaner Metals Vice President Peter Grant said the latest economic data “reinforced hopes for a December cut,” adding that nothing released this week has challenged the market’s dovish expectations. Lower rates typically support gold by reducing the opportunity cost of holding non-yielding assets.
Gold Technical Outlook:
Gold traded choppy on Tuesday. After dipping to 4,122 early in the session, prices quickly rebounded toward 4,155 before retreating again. The daily candle closed as a long-legged doji around 4,131, reflecting renewed indecision. Short-term momentum now centers around support at 4,110. A break above 4,159 would likely trigger a fresh bullish extension.
Key Gold Levels:
- Resistance: 4,160 to 4,180
- Support: 4,120 to 4,100
Oil
Oil prices extended their decline on Tuesday, falling more than 1 percent as Ukraine signaled it may accept a U.S.-drafted peace framework. The possibility of the war ending raised the prospect of Russian oil returning to global markets and deepening supply surplus concerns.
Brent crude fell 1.4 percent to 62.48 dollars per barrel, while WTI dropped 1.5 percent to 57.95 dollars, with both contracts touching their lowest levels since October 22.
Ukrainian officials said President Zelensky may travel to the U.S. in the coming days to finalize discussions with President Trump on a potential agreement. However, Russia warned it will not accept any deal that compromises its objectives, and fresh missile strikes on Kyiv highlighted the fragility of the situation.
Analysts noted that a formal peace agreement could lead Western nations to ease restrictions on Russian oil exports. Deutsche Bank forecasts a global surplus of at least 2 million barrels per day in 2026, with few signs of a near-term rebalancing.
Oil Technical Outlook:
Oil remains under pressure on the daily chart, with MACD diverging lower and prices retesting the 56-dollar area. A break below 56 would confirm a broader downtrend. Short-term (1H) momentum has improved slightly from 57.40 support, but the overall trend remains fragile.
Key Oil Levels:
- Resistance: 59.5 to 60.5
- Support: 57.0 to 56.0
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