Forex News
- Gold price drifts higher to around $4,230 in Monday’s early Asian session.
- Rising Fed rate cut bets support the Gold price.
- The potential of a Ukraine peace deal might cap the yellow metal’s upside.
Gold price (XAU/USD) trades in positive territory near $4,230 during the early Asian trading hours on Monday. The precious metal edges higher amid growing speculation that the US Federal Reserve (Fed) may cut interest rates in December. Traders await the release of the US ISM Manufacturing Purchasing Managers Index (PMI) report for November later on Monday.
Expectations of continued monetary policy easing by the Fed have been a primary driver of the yellow metal price. Traders increase their bets on a December rate cut following recent weaker US economic data and dovish remarks from Fed policymakers. According to the CME FedWatch Tool, financial markets are now pricing in nearly an 87% probability of a rate cut at the conclusion of the Fed's December 9-10 meeting, up from a 71% chance a week ago. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
The US ISM Manufacturing PMI will be published later in the day, which is expected to ease slightly to 48.6 in November from 48.7 in October. In case of a stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
Optimism surrounding peace talks between the United States and Ukraine could reduce gold's appeal as a safe-haven asset. The Guardian reported on Sunday that US Secretary of State Marco Rubio said a meeting between the US and Ukrainian officials was "very productive," but more work remains to be done towards ending Russia's war in Ukraine. US President Donald Trump’s special envoy, Steve Witkoff, will travel to Moscow to meet Vladimir Putin later this week.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- AUD/USD consolidates amid China’s disappointing official PMIs released over the weekend.
- The divergent Fed-RBA policy expectations lend support to spot prices and favor bullish traders.
- Friday’s breakout through the 100-day SMA backs the case for a further near-term appreciation.
The AUD/USD pair kicks off the new week on a subdued note in reaction to unimpressive China's official PMIs released over the weekend, though the downside remains cushioned. Spot prices currently trade just below mid-0.6500s, near a two-week top touched on Friday, and seem poised to build on the recent strong move up witnessed over the past week or so.
The National Bureau of Statistics' survey showed on Sunday that China's official Manufacturing PMI remained below the 50.0 mark, in the contraction territory, for the eighth month in November. Adding to this, China's Non-Manufacturing PMI fell from 50.1 in the previous month to 49.5, marking the lowest reading since December 2022 and the first contraction in nearly three years.
The immediate market reaction, however, turns out to be short-lived amid easing trade tensions and the recent government measures announced to boost consumption in the world's second-largest economy. This, along with diminishing odds for more policy easing by the Reserve Bank of Australia (RBA), acts as a tailwind for the Aussie amid a weaker US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a two-week low amid the growing acceptance that the Federal Reserve (Fed) will lower borrowing costs again this month. Apart from this, the underlying bullish sentiment in the financial markets undermines the safe-haven buck and should benefit the riskier AUD/USD pair.
Even from a technical perspective, Friday's breakout through the 100-day Simple Moving Average (SMA) backs the case for a further near-term appreciating move. Traders, however, seem reluctant to place aggressive bets and opt to wait for this week's important US macro releases, scheduled at the start of a new month, starting with the ISM Manufacturing PMI later today.
Economic Indicator
NBS Non-Manufacturing PMI
The NBS Non-manufacturing Purchasing Managers Index (PMI), released by the China Federation of Logistics & Purchasing (CFLP) and China’s National Bureau of Statistics (NBS), is a leading indicator gauging business activity in China’s non-manufacturing sector, namely services and construction.The data is derived from surveys of senior executives at services and construction companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the non-manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among service providers and real-estate is generally declining, which is seen as bearish for CNY.
Read more.Last release: Sun Nov 30, 2025 01:30
Frequency: Monthly
Actual: 49.5
Consensus: -
Previous: 50.1
Source: China Federation of Logistics and Purchasing
China Federation of Logistics and Purchasing (CFLP) publishes the non-manufacturing PMI on a monthly basis. The gauge highlights the performance of China’s service sector, which has a significant impact on the global FX market, given the size of the Chinese economy. An expansion in the Chinese service sector activity points to signs of economic improvement and vice-versa.
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