The continued strength of the US dollar put pressure on gold prices, but safe-haven demand limited the decline.
2025-11-04 13:32:25
Gold prices (XAU/USD) remained under pressure below the psychological level of $4,000 on Tuesday, encountering renewed selling pressure during the Asian session.
Although gold prices managed to stay above the previous trading day's lows, the overall trend showed a widening divergence between bulls and bears, with investors remaining cautious amid uncertainty surrounding fundamental signals.
The dollar attracted buying for the fifth consecutive day, hitting a new high since early August, mainly driven by the Federal Reserve's hawkish stance, which reduced the appeal of gold, a non-interest-bearing asset. Fed Chairman Powell's remarks last week became a turning point for the market, as he emphasized that further rate cuts at the December meeting were "not a certainty."
This statement quickly dampened market expectations for interest rate cuts, with only about a 65% probability of it being priced into the December FOMC meeting. The strong dollar continues to limit upside potential for gold prices, while the recovery in global stock markets has further weakened the safe-haven demand for gold.
Meanwhile, the US government shutdown crisis continues to escalate, with the two parties in Congress still unable to bridge the gap on budget appropriations, making this political deadlock potentially the longest government shutdown in US history.
Republican Senator John Kennedy stated that he would not force the bill forward by changing procedural rules unless he secured Democratic support. Senate Majority Leader John Thune, however, expressed cautious optimism that the shutdown would end this week.
Market concerns that an extended government shutdown could weaken economic activity and drag down the dollar, thus providing some support for gold.
From a technical perspective, gold prices encountered resistance near the 200-hour simple moving average (approximately $4025) and failed to break through the key resistance zone. A further drop below the $3960 level could trigger a new round of downward movement, targeting the $3940 and $3900 areas.
Conversely, if gold prices regain a foothold above $4,000 and break through the $4,045 resistance level, a short-term short-covering rally may occur, potentially pushing gold prices back to the $4,100 mark. Market analysts point out that the daily chart currently shows a clear consolidation pattern, and a clearer breakout signal is needed to confirm the direction.
Editor's Note:
Gold's short-term movement remains constrained by a strong dollar and expectations surrounding Federal Reserve policy. While gold prices currently lack upward momentum, the ongoing risk of government shutdowns and geopolitical uncertainty provide a floor for gold. If the dollar's rise slows, gold is expected to resume its upward trend and retest the area above $4,000.
Although gold prices managed to stay above the previous trading day's lows, the overall trend showed a widening divergence between bulls and bears, with investors remaining cautious amid uncertainty surrounding fundamental signals.
The dollar attracted buying for the fifth consecutive day, hitting a new high since early August, mainly driven by the Federal Reserve's hawkish stance, which reduced the appeal of gold, a non-interest-bearing asset. Fed Chairman Powell's remarks last week became a turning point for the market, as he emphasized that further rate cuts at the December meeting were "not a certainty."
This statement quickly dampened market expectations for interest rate cuts, with only about a 65% probability of it being priced into the December FOMC meeting. The strong dollar continues to limit upside potential for gold prices, while the recovery in global stock markets has further weakened the safe-haven demand for gold.
Meanwhile, the US government shutdown crisis continues to escalate, with the two parties in Congress still unable to bridge the gap on budget appropriations, making this political deadlock potentially the longest government shutdown in US history.
Republican Senator John Kennedy stated that he would not force the bill forward by changing procedural rules unless he secured Democratic support. Senate Majority Leader John Thune, however, expressed cautious optimism that the shutdown would end this week.
Market concerns that an extended government shutdown could weaken economic activity and drag down the dollar, thus providing some support for gold.
From a technical perspective, gold prices encountered resistance near the 200-hour simple moving average (approximately $4025) and failed to break through the key resistance zone. A further drop below the $3960 level could trigger a new round of downward movement, targeting the $3940 and $3900 areas.
Conversely, if gold prices regain a foothold above $4,000 and break through the $4,045 resistance level, a short-term short-covering rally may occur, potentially pushing gold prices back to the $4,100 mark. Market analysts point out that the daily chart currently shows a clear consolidation pattern, and a clearer breakout signal is needed to confirm the direction.
Editor's Note:
Gold's short-term movement remains constrained by a strong dollar and expectations surrounding Federal Reserve policy. While gold prices currently lack upward momentum, the ongoing risk of government shutdowns and geopolitical uncertainty provide a floor for gold. If the dollar's rise slows, gold is expected to resume its upward trend and retest the area above $4,000.
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