Steady Gold Prices Amid Economic Uncertainty
Gold is trading steadily near $3,975, supported by risk aversion in the market despite a stronger US Dollar limiting upward momentum. The price remains within a tight range, having briefly touched Tuesday’s low of $3,928.
Market Influences and Sentiment
Global concerns over US technology stocks and potential corrections have injected caution across Asian and European markets. The prolonged US government shutdown, now lasting 36 days, adds further uncertainty to the economic landscape.
US Dollar and Economic Data Impact
The strengthening US Dollar restricts gold's gains, though demand is bolstered by increased risk aversion. Recent data shows private employment rose by 42,000 in October, surpassing expectations, while the ISM Services PMI signals growth in the sector.
Trade Policy Developments
President Trump has issued executive orders aimed at reducing trade tensions with China. Meanwhile, the legality of tariffs is under scrutiny as the US Supreme Court reviews previous lower court rulings that questioned their validity.
Federal Reserve and Market Outlook
The prospect of Federal Reserve rate cuts remains uncertain, with market probabilities for a December cut dropping from 94% to 68%. Delays in official economic data due to the shutdown complicate forecasts for future Fed actions.
Technical Perspective on Gold
Technically, gold shows signs of indecision, trading just below the 21-period Simple Moving Average with a slight bearish tendency. The Relative Strength Index (RSI) at 44 suggests weak momentum and continued sideways price movement.
"Gold trades sideways near $3,975 as risk aversion supports demand amid dollar strength and economic uncertainty."
"President Trump’s recent executive orders aim to ease trade tensions with China."
Author's summary: Gold prices remain stable, balancing demand supported by risk aversion and a strong US Dollar, while economic and policy uncertainties keep the market cautious.