Gold at $4,105: Fed Hawks May Limit Rally Even as Economic Uncertainty Lingers

The precious metal bounces back as traders await critical Fedspeak

Gold rallied to approximately $4,105 during early Asia-Pacific trading, reversing a two-day decline. The rebound comes as markets brace for a wave of delayed economic reports—a direct consequence of the 43-day US government shutdown that ended last week when President Trump signed the funding bill.

Why the bounce? The dollar’s weakness is helping

The immediate driver behind Gold’s recovery is a softer US Dollar environment. As the world’s reserve currency weakens, USD-denominated commodities like Gold become more attractive to international buyers. However, this tailwind may not last long.

Fed speakers loom large: Hawkish vs Dovish narrative shifts the balance

The real story isn’t the bounce—it’s what comes next. Four Fed officials are scheduled to speak on Monday: John Williams, Philip Jefferson, Neel Kashkari, and Christopher Waller. Their commentary will be crucial for Gold traders.

Recent hawkish signals from Federal Reserve officials have already tempered bullish sentiment. Kansas City Fed President Jeffery Schmid recently emphasized that policy should “lean against demand growth,” characterizing current Fed settings as “modestly restrictive.” This hawkish posture directly contradicts dovish expectations for rate cuts.

Market pricing has already shifted

The December rate-cut probability tells the story. Just one week ago, markets priced in a 62.9% chance of a 25 basis points (bps) cut. That number has now fallen to 54%—a clear signal that hawkish Fed rhetoric is dampening cut expectations. The closer we get to December, the more these numbers matter for Gold’s trajectory.

Uncertainty plays both ways for the yellow metal

Gold traditionally thrives in uncertain environments, especially when interest rates are low. The resumption of delayed economic data could reveal job market weakness and a broader slowdown, potentially supporting the precious metal. Yet the same data might also reinforce the Fed’s hawkish stance if inflation concerns persist.

The bottom line: While economic uncertainty provides some support for Gold, Fed officials’ hawkish commentary remains the ceiling on any meaningful rally above $4,105. Investors should monitor both the delayed data releases and the Fed speakers this week—both will shape whether Gold’s recovery is sustainable or just a temporary relief bounce.