Gold is being closely suppressed by the $100 level; who will blink first tonight?
2025-11-03 21:55:09
On Monday (November 3), during the North American session, spot gold traded in a narrow range above last week's lows, fluctuating around $4015. Gold prices had previously dipped to $3962.60 before rebounding quickly, but remained suppressed below $4050, failing to break out of the range. The market is currently assessing the latest US macroeconomic outlook and the performance of the US dollar, with both bullish and bearish factors impacting gold, keeping prices in a tug-of-war.
Last week, the Federal Reserve cut the federal funds rate by 25 basis points as expected, but its post-meeting rhetoric was cautious, publicly stating that the possibility of further easing this year is limited. This dovish yet hawkish signal resonated in the foreign exchange market, with the dollar index approaching 100 for the first time since August. A strong dollar typically weakens the attractiveness of dollar-denominated assets, which is one of the direct reasons why gold has struggled to generate sustained buying interest at the start of this week. Meanwhile, the US government shutdown has entered its 34th day. While fiscal disruptions have made the market wary of the timing of some official economic data releases, they have also prompted the Federal Reserve to prioritize financial conditions over short-term data in its decision-making, thus weakening market bets on another rate cut in December and providing additional support for the dollar.
This week will see the release of several US economic indicators from private institutions. The October ISM Manufacturing PMI is expected to rise slightly to 49.5 from 49.1, and the ADP employment change is estimated at approximately 25,000 new jobs. If these data indicate that the US economy is still expanding moderately and there is no immediate pressure from the Federal Reserve to ease monetary policy, defensive buying of gold will be difficult to fully materialize. However, if the data weakens, it will reignite speculation about consecutive interest rate cuts next year, at which point gold may retest its resistance levels. Speeches by several Fed officials will also be amplified by the market, especially descriptions of inflation stickiness and fiscal uncertainty, which are likely to be quickly reflected in the market through the "interest rate expectations—dollar—gold" chain.
Externally, the US has recently signaled a temporary easing of tensions with its major trading partners regarding tariffs and export restrictions, with some planned tariff increases being postponed. This has boosted risk appetite in global equity markets. A rebound in risk assets often diverts allocations to safe-haven assets like gold, a significant factor suppressing gold prices. In contrast, geopolitical tensions in the Middle East and elsewhere have not completely subsided, and geopolitical premiums remain low, providing crucial support for gold to stay above $4,000 at present. The US Supreme Court will also hold a hearing this week on the executive branch's use of emergency powers to impose tariffs; a ruling with significant restrictions could also put downward pressure on the dollar on a sentiment level.
From the 30-minute candlestick chart, after falling from the high of $4046.13, gold formed a clear horizontal support zone near the $4000 psychological level. Multiple pullbacks have been successfully sustained, indicating active buying interest around the $4000 level. The first resistance level is at $4027.87, followed by $4035.98, and then the previous high of $4046.13. These three resistance levels form a stepped structure, constituting the upper edge of the current range. If the price can effectively hold above $4027.87 and close with a solid bullish candlestick on the 30-minute chart, it may retest the $4035.98-$4046.13 range. Conversely, as long as the price remains below $4020, the range-bound trading pattern will remain unchanged.
The RSI (14) is running not far above 50, neither entering overbought territory nor falling back into the weak zone, indicating that the short-term technical state is still in a state of oscillation with a slight upward bias. Overall, $4,000 is the first line of defense that the bulls must hold. If it falls below, the next targets will be the previous low of $3,988.91 and even $3,962.60. If it can recover and consolidate above $4,030, it is expected to extend to the high of $4,046 or even higher.
In the short term, whether gold prices can break out of the $3990-$4050 consolidation range hinges on two key factors: first, whether the private sector economic data released this week in the US will be enough to shake market expectations of a "pause in interest rate cuts" by the Federal Reserve; and second, whether the US government shutdown will further drag down consumption and confidence, thus forcing the Fed to release more easing signals in terms of expectations. If the data is strong and there are signs of easing in the shutdown, then the dollar index breaking through 100 will be highly probable, and gold may retest the $4000 level, or even fall to $3988.91. If the data falls short of expectations and the shutdown continues to extend, the interest rate market will more actively price in next year's easing cycle, and gold may take the opportunity to challenge the high of $4046.13 and attempt to open up space above $4050.
In the medium term, the underlying bullish logic for gold remains intact: major central banks worldwide are generally in or nearing an easing cycle, US fiscal uncertainty is rising, and geopolitical risks are recurring, all driving institutions to maintain a certain proportion of gold allocation. However, at the current stage, a strong dollar and the temporary recovery of risk assets have weakened the urgency of this logic, forcing a slowdown in the upward momentum. Therefore, a more reasonable expectation is that, in the absence of a major catalyst, gold will consolidate within a range around $4,000, accumulating momentum; only once the dollar weakens or US monetary policy shifts towards greater easing will gold prices resume their upward trend.
Fundamentals:
Last week, the Federal Reserve cut the federal funds rate by 25 basis points as expected, but its post-meeting rhetoric was cautious, publicly stating that the possibility of further easing this year is limited. This dovish yet hawkish signal resonated in the foreign exchange market, with the dollar index approaching 100 for the first time since August. A strong dollar typically weakens the attractiveness of dollar-denominated assets, which is one of the direct reasons why gold has struggled to generate sustained buying interest at the start of this week. Meanwhile, the US government shutdown has entered its 34th day. While fiscal disruptions have made the market wary of the timing of some official economic data releases, they have also prompted the Federal Reserve to prioritize financial conditions over short-term data in its decision-making, thus weakening market bets on another rate cut in December and providing additional support for the dollar.
This week will see the release of several US economic indicators from private institutions. The October ISM Manufacturing PMI is expected to rise slightly to 49.5 from 49.1, and the ADP employment change is estimated at approximately 25,000 new jobs. If these data indicate that the US economy is still expanding moderately and there is no immediate pressure from the Federal Reserve to ease monetary policy, defensive buying of gold will be difficult to fully materialize. However, if the data weakens, it will reignite speculation about consecutive interest rate cuts next year, at which point gold may retest its resistance levels. Speeches by several Fed officials will also be amplified by the market, especially descriptions of inflation stickiness and fiscal uncertainty, which are likely to be quickly reflected in the market through the "interest rate expectations—dollar—gold" chain.
Externally, the US has recently signaled a temporary easing of tensions with its major trading partners regarding tariffs and export restrictions, with some planned tariff increases being postponed. This has boosted risk appetite in global equity markets. A rebound in risk assets often diverts allocations to safe-haven assets like gold, a significant factor suppressing gold prices. In contrast, geopolitical tensions in the Middle East and elsewhere have not completely subsided, and geopolitical premiums remain low, providing crucial support for gold to stay above $4,000 at present. The US Supreme Court will also hold a hearing this week on the executive branch's use of emergency powers to impose tariffs; a ruling with significant restrictions could also put downward pressure on the dollar on a sentiment level.
Technical aspects:
From the 30-minute candlestick chart, after falling from the high of $4046.13, gold formed a clear horizontal support zone near the $4000 psychological level. Multiple pullbacks have been successfully sustained, indicating active buying interest around the $4000 level. The first resistance level is at $4027.87, followed by $4035.98, and then the previous high of $4046.13. These three resistance levels form a stepped structure, constituting the upper edge of the current range. If the price can effectively hold above $4027.87 and close with a solid bullish candlestick on the 30-minute chart, it may retest the $4035.98-$4046.13 range. Conversely, as long as the price remains below $4020, the range-bound trading pattern will remain unchanged.
The RSI (14) is running not far above 50, neither entering overbought territory nor falling back into the weak zone, indicating that the short-term technical state is still in a state of oscillation with a slight upward bias. Overall, $4,000 is the first line of defense that the bulls must hold. If it falls below, the next targets will be the previous low of $3,988.91 and even $3,962.60. If it can recover and consolidate above $4,030, it is expected to extend to the high of $4,046 or even higher.
Market Outlook:
In the short term, whether gold prices can break out of the $3990-$4050 consolidation range hinges on two key factors: first, whether the private sector economic data released this week in the US will be enough to shake market expectations of a "pause in interest rate cuts" by the Federal Reserve; and second, whether the US government shutdown will further drag down consumption and confidence, thus forcing the Fed to release more easing signals in terms of expectations. If the data is strong and there are signs of easing in the shutdown, then the dollar index breaking through 100 will be highly probable, and gold may retest the $4000 level, or even fall to $3988.91. If the data falls short of expectations and the shutdown continues to extend, the interest rate market will more actively price in next year's easing cycle, and gold may take the opportunity to challenge the high of $4046.13 and attempt to open up space above $4050.
In the medium term, the underlying bullish logic for gold remains intact: major central banks worldwide are generally in or nearing an easing cycle, US fiscal uncertainty is rising, and geopolitical risks are recurring, all driving institutions to maintain a certain proportion of gold allocation. However, at the current stage, a strong dollar and the temporary recovery of risk assets have weakened the urgency of this logic, forcing a slowdown in the upward momentum. Therefore, a more reasonable expectation is that, in the absence of a major catalyst, gold will consolidate within a range around $4,000, accumulating momentum; only once the dollar weakens or US monetary policy shifts towards greater easing will gold prices resume their upward trend.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
