The uncertainty surrounding the monetary policy of the US Federal Reserve (Fed) is expected to end next week, bringing an important orientation for the gold market that is trying to create a new price level around 4,200 USD/ounce.
Over the past 6 weeks, US interest rate expectations have fluctuated strongly. At the most recent meeting, Fed Chairman Jerome Powell warned the market that cutting interest rates in December is not obvious. This phenomenon has caused investors to immediately remove the possibility of lowering interest rates from the calculation table.
But steady inflation and data showing a clear slowdown in US labor have restored expectations of a rate cut, less than a week before the meeting.
The CME FedWatch tool recorded that the market had bet 90% on the possibility of the Fed cutting interest rates at the end of October, before falling to 30% after the November meeting. Up to now, this probability has returned to nearly 90% for the last meeting of 2025.
The fluctuations in interest rate expectations have caused fluctuations in gold prices. After falling to the $3,900/ounce zone in November, gold recovered but was "stuck" at $4,200/ounce, unable to break through to the historical peak in October.
Some experts say gold needs more momentum to return to the peak. To hit a new peak, gold needs a combination of strong rate cuts, a weak US dollar and increased safe-haven demand, said Aaron Hill, chief market analyst at FP Markets. A breakthrough before the end of the year is unlikely to happen without a macro shock or a very dovish signal from the Fed.
Along with the interest rate decision, analysts especially monitor the Fed's interest rate roadmap forecast. Ms. Barbara Lambrecht (Commerzbank) said that concerns about economic slowdown and political pressure could force the Fed to ease more strongly than expected.
If Fed members expect more rate cuts than in September, gold prices could increase sharply, especially as the market has not yet priced this out at its meetings in early 2026, she said.
Mr. Lukman Otunuga (FXTM) predicted that gold prices will continue to fluctuate strongly due to the Fed having to make a decision in the context of a lack of data, when the October jobs report and the latest CPI are all absent.
Any surprise can spark a stir. If gold breaks above $4,240 an ounce, a door to $4,300 will open; on the contrary, falling below $4,200 could push prices down to $4,180-4.160, Otunuga said.
Meanwhile, Eric Strand, founder of AuAg Funds, said the Fed will have to implement a strong monetary easing program. The huge deficit and debt mean more money will be printed out. Therefore, gold will continue to increase, regardless of the current price.
Next week, in addition to the Fed, the three major central banks - Australia, Canada and Switzerland - will also announce interest rate decisions, and the market predicts all three will remain the same. This has caused all eyes to focus on the Fed - a key factor shaping a new direction for gold prices in the final retreat period of 2025.
World gold prices closed last weekend's session at 4,197.81 USD/ounce, down 15.34 USD, equivalent to a decrease of 0.36%.
Regarding domestic gold prices, SJC gold bar prices are trading around 152.7 - 154.2 million VND/tael (buy - sell). The price of 9999 Bao Tin Minh Chau gold rings is trading around 150.5 - 153.5 million VND/tael (buy - sell).
Expectations of Fed interest rate cuts continue to be reinforced
According to the latest data from the payroll processing company ADP, the gold market could see a new rally as the US private-sector labor market weakens significantly. Weaker US economic data and dovish signals from Fed officials have reinforced expectations of a rate cut at the central bank's December 9-10 meeting, with brokerage firms predicting policy easing.
