XAU/USD rises 1.7% to $2,710 on Fed rate cut expectations

XAU/USD surged 1.7% to $2,710 on Monday, extending its bullish momentum as traders price in over 70% probability of a Federal Reserve rate cut in December. The precious metal's strength reflects improving risk appetite across financial markets and growing expectations of monetary policy easing. Gold's inverse relationship with USD strength continues to drive price action, with the dollar weakening on dovish Fed expectations. Technical analysis shows XAU/USD consolidating within a pennant formation, suggesting a potential breakout pending. Immediate resistance lies at $2,720 (pennant upper boundary), while support holds at $2,685 (pennant lower boundary). A decisive break above the pattern could target the psychological $2,750 level, while failure to hold support may see a retest of $2,650. Traders should monitor upcoming Fed communications and US economic data releases for directional cues on gold's next major move.