## Economic Data Weakens, Traders Optimistic About Fed Rate Cut by Year-End

**Gold Price Strengthens, Market Focuses on Fed's December Decision**

Recent US economic data shows signs of slowing price growth, while consumer momentum clearly weakens, fueling market expectations of a Fed rate cut by the end of the year. Gold broke above the $4159 level on Tuesday, and after dipping to a daily low of $4109, it consolidated around $4141, with a daily gain of over 0.14%.

According to currency market pricing, traders estimate an 82% probability that the Fed will cut interest rates by 25 basis points at the December 9-10 FOMC meeting, a significant increase from 50% last week. Several US economic indicators will be released this Wednesday, and data such as initial jobless claims and durable goods orders around Thursday early morning Japan time will serve as important references for FOMC members before entering a silent period.

## Stagnant Inflation, Weak Consumption, US Dollar Under Pressure

**Key Economic Data Overview**

The US Producer Price Index (PPI) for September rose 2.7% year-over-year, in line with expectations and the previous month’s reading, indicating that producer-side price pressures have stabilized. More notably, the core PPI fell from 2.9% to 2.6%, below the expected 2.7%, further confirming signs of cooling inflation.

Retail sales also disappointed. September retail sales increased by 0.2% month-over-month, lower than August’s 0.6% gain, indicating a clear slowdown in consumer spending. More concerning, the Conference Board’s Consumer Confidence Index for November dropped from 95.5 in October to 88.7, a monthly decline of 6.8 points, reflecting increased worries among US households about employment prospects and income stability, partly due to the risk of a government shutdown.

**US Dollar Index Under Pressure, Treasury Yields Decline**

Against this backdrop, the US Dollar Index fell 0.50%, breaking below the 100 mark to 99.69. US Treasury yields also declined, with the 10-year Treasury yield dropping 3 bps to 4.00%, and real yields, which are inversely related to gold prices, also fell 3 bps to 1.80%. This combination provides support for gold.

## Technical Outlook: Upward Potential Awaiting Confirmation

**Key Levels Analysis for Gold**

Gold remains biased to the upside, despite consolidating below the $4200 level. The Relative Strength Index (RSI) remains stable but above 50, indicating that buyers still dominate the market. Traders are waiting for new catalysts to confirm the next direction.

**Support and Resistance Levels**

The first resistance is at $4200, followed by the November 13 high of $4245. If gold breaks above $4245, it could open further upside toward $4300 and the all-time high of $4381. Conversely, a break below the $4100 support could clear the way to challenge the 20-day simple moving average at $4045, with a potential move toward the $4000 level.

Market focus remains on the Fed’s December FOMC decision and this week’s economic data releases, which will lay the foundation for gold’s subsequent technical breakout.