Gold prices surged on Thursday, reaching their highest level in more than a month after the U.S. Federal Reserve cut interest rates by a further 25 basis points. The decision led to a sharp weakening of the U.S. dollar, which in turn boosted buying interest in the precious metals market.

Spot gold rose 1.2% to $4,280.08 an ounce at 18:42 GMT, its highest level since October 21.

Fundamental factors supporting gold prices
The U.S. dollar fell to its lowest level in seven weeks, making dollar-denominated gold more attractive to international investors.

According to Edward Meir of Marex:

“Inflation has not truly returned to the Fed’s 2% target. When you cut rates in an environment where inflation is still not optimal, that is a very positive backdrop for gold.”

The Fed has just delivered its third consecutive rate cut, while signaling it may pause to monitor developments in the labor market and inflation—which remain “slightly elevated.”

Since the start of his second term, U.S. President Donald Trump has consistently pushed for lower interest rates, and his nominee for the next Fed Chair White House economic adviser Kevin Hassett is expected to maintain this pro-growth stance.

Investors are now watching the November nonfarm payrolls (NFP) report, due on December 16, to assess whether the Fed will continue to ease policy.

Technical analysis: Gold is breaking out of a key consolidation range
As previously anticipated, following the Fed meeting, gold has now established a clearer direction. Our Scenario 1 has been triggered, and gold is extending its upward move.

If you’re familiar with price patterns, you can easily spot that the area from the white t2 wave to the white l2 wave has formed an ascending continuation triangle – a classic pattern often seen in the wave 4 correction zone before price enters a powerful t3 wave in Million-Dollar Pattern No. 1 At the moment, the momentum of wave t3 is driving gold toward higher price levels.

Short-term target: 4,310 – 4,325 USD/oz

Extended target: 4,360 – 4,380 USD/oz (historical high zone)

Gold is entering a new acceleration phase

The strong rally following the Fed’s decision shows that the gold market has finally broken out of the extended choppy range it had been stuck in for days. A rate cut in an environment where inflation has not fully “cooled down” creates an extremely favorable backdrop for gold to maintain its upward trajectory.

In the short term, the technical setup is supporting an extended leg higher, with wave t3 playing the leading role. In the medium term, expectations that the Fed will continue to lean toward easing, together with ongoing global geopolitical risks, will provide a solid foundation for gold’s bullish trend.

This is the stage where the market transitions from accumulation to acceleration, and trading opportunities become more attractive.

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