**Gold Price Advances on Thursday Despite Pullback Below $4,000**
Gold prices surged on Thursday, reaching a daily high of $4,019 before retreating just below the significant $4,000 mark. At the time of writing, XAU/USD is trading with gains of over 0.10%, hovering around $3,985. The yellow metal steadied after a brief pullback, supported by a weaker US Dollar, falling Treasury yields, and renewed political and trade uncertainties.
**Market Drivers and Economic Updates**
The main driver underpinning gold during the day was the US Dollar weakness. Concerns over the US government shutdown potentially extending further weighed on the currency. Republican House Leader Mike Johnson expressed less optimism about a resolution, which contributed to the Dollar’s decline.
Markets were also rattled by the release of the October Challenger report, which revealed that companies cut over 150,000 jobs—the largest reduction for the month in more than 20 years. This news led to a recalibration in expectations for Federal Reserve policy, increasing the likelihood of a rate cut at the December meeting.
Meanwhile, the US Supreme Court is reportedly growing skeptical about tariffs imposed by President Donald Trump. According to Bloomberg, “Businesses and countries suffering from the duties and looking for resolution are set for months of uncertainty,” adding further to the market’s cautious sentiment.
**Gold’s Outlook Amid Uncertainty**
Given the current environment of uncertainty and low interest rates, bullion appears poised to resume its uptrend. Historically, gold performs well in such conditions, acting as a safe haven asset.
Federal Reserve officials continue to offer mixed signals. Cleveland Fed President Beth Hammack maintains a hawkish stance, emphasizing that it is not obvious the Fed should cut rates again given ongoing inflation concerns. Conversely, Fed Governor Michael Barr has taken a more neutral tone, acknowledging progress on inflation but emphasizing that “there is still work to do” and highlighting the importance of the solid jobs market.
New York Fed President John Williams commented that neutral interest rates are difficult to precisely determine but suggested model-based estimates place them around 1%. Chicago Fed President Austan Goolsbee expressed caution about further rate cuts, noting that the lack of official inflation data during the government shutdown “accentuates” his concern.
**Daily Market Movers**
– The US Dollar Index (DXY), which measures the Dollar against six major currencies, dropped 0.42% to 99.73.
– US Treasury yields fell sharply; the 10-year note yield declined by 7.5 basis points to 4.085%.
– Real US Treasury yields, which inversely correlate with gold prices, collapsed by 8.5 basis points to 1.785%.
The October Challenger report by Gray & Christmas highlighted that layoffs, the largest in over two decades for the month, were largely driven by industries adopting AI-driven changes.
Following these developments, money markets increased the probability of a 25-basis-point rate cut by the Federal Reserve in December to 69%, up from 62% the previous day, per Prime Market Terminal data.
**Technical Outlook: Gold Eyes $4,000**
Gold prices found short-term support around $3,964, the day’s low, before edging higher. For the bulls to extend the recovery, reclaiming and closing above the $4,000 milestone on a daily basis is crucial.
The Relative Strength Index (RSI) is trending upwards, indicating improving momentum, though it remains below the neutral 50 level. Should gold sustain a move above $4,000, it would next face resistance near the 20-day Simple Moving Average (SMA) at approximately $4,083.
On the downside, a drop below the October 28 low of $3,886 would open the path toward testing the 50-day SMA around $3,854.
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*Stay tuned for further updates as global economic developments continue to influence gold prices.*
https://bitcoinethereumnews.com/finance/gold-steadies-near-4000-as-us-shutdown-layoffs-concerns-lift-demand/