Gold weakens after elevated US inflation and Federal Reserve comments raise interest rate hike expectations

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Gold drops as US inflation and Fed signals lift rate hike speculation

Highlights

Stronger-than-expected US inflation data and hawkish Federal Reserve statements have increased expectations for a larger December interest rate hike.
Higher rate hike speculation has strengthened the US dollar and reduced the appeal of gold as a non-yielding asset.
Gold trades below key short-term trend levels, with oversold technical signals and downward momentum persisting until US policy outlook shifts.

US inflation surprise and hawkish Fed expectations pressure gold

According to CNBC, on November 11, 2026, hotter-than-expected inflation data in the US and hawkish statements from Federal Reserve policymakers led to increased expectations for a larger interest rate hike at the December policy meeting.

These developments strengthened the US dollar and reduced the appeal of gold as a non-yielding asset, with higher interest rate expectations typically weighing on gold prices.

Rising rate hike speculation has shifted attention to upcoming central bank decisions and fresh inflation data, while no immediate counterbalancing news has been reported.

Persistent downside signals dominate gold's 4H chart

On the 4H chart, XAU remains below the 20- and 50-period simple moving averages, highlighting ongoing short-term weakness. The H4 Kijun level is acting as resistance, while all main trend-following indicators currently point lower.

Technical signals reinforce the cautious stance, with RSI deep in the oversold zone and both MACD and ADX indicating persistent selling pressure. Oversold momentum is acute, but no evidence of reversal has emerged yet.

US policy and inflation to shape gold's direction

Looking ahead, risks to gold remain tilted to the downside as long as US rate hike expectations and dollar strength persist. A recovery toward or above the H4 Kijun level around $3,981 could help stabilize sentiment. Monitoring further US Federal Reserve guidance and inflation figures will be crucial for the next trend development.

Anton Kharitonov, Traders Union expert, sees sustained weakness in gold driven by stronger US dollar momentum and ongoing rate hike speculation. He notes that technical indicators remain firmly bearish, with price action suppressed below key moving averages and oversold momentum showing no reversal. Macroeconomic news reinforces a defensive stance as markets react negatively to hawkish Federal Reserve signals. "Until the dollar loses steam or US rate expectations ease, I remain cautious on gold, looking for stability only above the H4 Kijun level."

Previously it was reported that gold prices in Pakistan declined in tandem with global bullion weakness amid broader pressure on precious metals. The current analysis strengthens this view, as renewed US inflation surprises and heightened rate hike expectations reinforce downside risks for gold, making upcoming Federal Reserve policy decisions and inflation data the key factors to monitor for future trend direction.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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