Gold’s Bull Run Faces Critical Test

Investors in the precious metal are encountering a period of significant volatility. The primary driver behind gold's previous ascent—growing anticipation of interest rate cuts—is now being challenged by the latest communications from the U.S. Federal Reserve. This shift in sentiment raises a pivotal question for the market: is this a temporary, healthy pullback within a longer-term uptrend, or does it signal a more profound reversal?

The minutes from the most recent Federal Reserve meeting have been the key catalyst for the changed atmosphere. They exposed a significant divergence of opinion among policymakers. Some officials emphasized the need to continue supporting the labor market, while others issued strong warnings about persistent inflationary pressures and the dangers of relaxing monetary policy prematurely.

This internal disagreement has had an immediate impact on market pricing. The probability of a further interest rate cut in December has plummeted. Traders are now assigning only a 34% chance to such a move, a sharp decline from the nearly 50% likelihood priced in previously. This shift is detrimental for non-yielding gold, as it makes interest-bearing assets comparatively more attractive.

Compounding the pressure, the uncertainty has propelled the U.S. Dollar Index to a two-week peak. A stronger greenback increases the cost of gold for buyers holding other currencies, thereby suppressing international demand.

Key Market Snapshot:
* Rate Expectations: Odds for a December rate cut have fallen to 34%.
* Currency Impact: The Dollar Index hits a two-week high.
* Technical Reading: The RSI (14) sits at 57.7, indicating a neutral condition.
* Price Action: The metal has shed approximately 2.57% over the past week.

Should investors sell immediately? Or is it worth buying Gold?

All Eyes on the US Labor Market

The current market dynamics are clearly reflected in the price chart. Gold is now trading at $4,067.10, moving further away from the record high it recently established. The next major challenge is already on the horizon, with investor focus shifting decisively toward the upcoming U.S. employment report.

Economists are forecasting the creation of roughly 50,000 new jobs, which would mark a substantial improvement over the weak figures from the prior month. A report that meets or exceeds these robust expectations would likely further constrain the Fed's leeway to implement rate reductions, potentially putting short-term downward pressure on gold.

A Bold Forecast Amidst the Gloom

From a technical perspective, market experts are closely monitoring the psychologically significant $4,000 level. A decisive break below this key support zone could trigger a slide toward $3,900, which would considerably darken the technical outlook.

However, not all voices in the market are pessimistic. In a contrarian move that has captured attention, the major bank UBS has surprisingly raised its mid-2026 price target to $4,500. Their analysts point to fundamental drivers that extend beyond the current concerns over interest rates. They argue that ongoing geopolitical tensions and the unwavering purchasing appetite of global central banks are likely to provide long-term support for the precious metal. For the immediate future, however, the price of gold remains highly sensitive to shifting expectations regarding the Fed's next moves.