Gold prices fell below $4,000 as gains faded and the market focused on speeches by Federal Reserve officials.
2025-11-07 01:52:57
On Thursday (November 6), spot gold briefly recovered the psychological level of $4,000 during the US trading session, before declining slightly amid a weakening dollar. Gold traded around $3,985, a pullback from the intraday high of $4,019, and the upward momentum stalled.
The ongoing US government shutdown has heightened market tensions, somewhat mitigating downward pressure on gold prices. This political impasse has sparked concerns about its potential economic impact and has also weighed on the dollar after several days of strong rebound.
However, both macroeconomic and technical factors may limit the upside potential of gold prices in the near term, making its gains appear limited. The ADP employment change report and the ISM non-manufacturing purchasing managers' index (PMI) both exceeded expectations, reinforcing market expectations that the Federal Reserve may pause interest rate cuts in December.
Meanwhile, global stock markets, which had recently been weak, stabilized and rebounded, improving market sentiment and curbing large-scale bets on gold. Nevertheless, the overall outlook for gold remains constructive amid ongoing geopolitical and economic risks.
Market drivers: Weaker dollar, focus on shutdown, tariffs and Fed comments
The US dollar index (DXY) is currently trading around 99.91, having retreated after briefly climbing to a five-month high of 100.36 on Wednesday.
Chicago Federal Reserve President Austan Goolsby stated that "most labor market indicators show stability," with only "moderate cooling" and "minor downside risks." He said he "may be reluctant to continue the rate-cutting cycle," but also noted that interest rates will stabilize at a level "well below" current levels.
The US government shutdown has become the longest in history, surpassing the previous record of 35 days. On Wednesday, President Trump urged Republicans to take all necessary steps to reopen the government, including considering abolishing the lengthy Senate debate process. The US Supreme Court heard arguments on Wednesday regarding the legality of President Trump's use of tariffs under the International Emergency Economic Powers Act (IEEPA). The hearing was closely watched, with several justices, including conservatives, questioning whether the 1977 law granted the president the power to implement broad trade measures without congressional approval.
The World Gold Council (WGC) released its "US Gold Demand Trends, Q3 2025" report on November 5th, showing that US gold demand surged 58% year-on-year to 186 tons, driven by record inflows into gold ETFs. In the third quarter, US-listed funds added 137 tons of gold, accounting for 62% of global inflows. With gold prices repeatedly hitting record highs, gold trading volume on the COMEX exchange and US ETFs also jumped to a record $208 billion per day in October.
Furthermore, the World Gold Council's "Statistical Report on Central Bank Gold Reserves" released on November 4th showed that central banks made net purchases of 39 tons of gold in September, the highest monthly level this year. Brazil led the pack with 15 tons of purchases, followed by Kazakhstan and Guatemala, bringing their year-to-date net purchases to 200 tons.
Technical Analysis
The 4-hour chart for gold shows prices trending slightly lower within a familiar range, with bears attempting to regain control of the short-term trend. Gold is currently testing the 50-period simple moving average (SMA) on the 4-hour chart.
On the upside, bulls need to overcome the resistance zone of $4,020-$4,050, which has successfully suppressed gold's upward attempts in several recent trading sessions. A clear breakout above this level could trigger further buying, pushing gold towards the $4,100-$4,150 area.
On the downside, the 50-period simple moving average at $3,985 is currently providing immediate support. A sustained break below this level could trigger new selling pressure, potentially pushing prices down to the $3,900 support level – a level where bargain hunting has previously held off the bears.
The Relative Strength Index (RSI) has risen back above the 50 midline, indicating improved bullish momentum, but has not yet given a clear breakout signal.
The ongoing US government shutdown has heightened market tensions, somewhat mitigating downward pressure on gold prices. This political impasse has sparked concerns about its potential economic impact and has also weighed on the dollar after several days of strong rebound.
However, both macroeconomic and technical factors may limit the upside potential of gold prices in the near term, making its gains appear limited. The ADP employment change report and the ISM non-manufacturing purchasing managers' index (PMI) both exceeded expectations, reinforcing market expectations that the Federal Reserve may pause interest rate cuts in December.
Meanwhile, global stock markets, which had recently been weak, stabilized and rebounded, improving market sentiment and curbing large-scale bets on gold. Nevertheless, the overall outlook for gold remains constructive amid ongoing geopolitical and economic risks.
Market drivers: Weaker dollar, focus on shutdown, tariffs and Fed comments
The US dollar index (DXY) is currently trading around 99.91, having retreated after briefly climbing to a five-month high of 100.36 on Wednesday.
Chicago Federal Reserve President Austan Goolsby stated that "most labor market indicators show stability," with only "moderate cooling" and "minor downside risks." He said he "may be reluctant to continue the rate-cutting cycle," but also noted that interest rates will stabilize at a level "well below" current levels.
The US government shutdown has become the longest in history, surpassing the previous record of 35 days. On Wednesday, President Trump urged Republicans to take all necessary steps to reopen the government, including considering abolishing the lengthy Senate debate process. The US Supreme Court heard arguments on Wednesday regarding the legality of President Trump's use of tariffs under the International Emergency Economic Powers Act (IEEPA). The hearing was closely watched, with several justices, including conservatives, questioning whether the 1977 law granted the president the power to implement broad trade measures without congressional approval.
The World Gold Council (WGC) released its "US Gold Demand Trends, Q3 2025" report on November 5th, showing that US gold demand surged 58% year-on-year to 186 tons, driven by record inflows into gold ETFs. In the third quarter, US-listed funds added 137 tons of gold, accounting for 62% of global inflows. With gold prices repeatedly hitting record highs, gold trading volume on the COMEX exchange and US ETFs also jumped to a record $208 billion per day in October.
Furthermore, the World Gold Council's "Statistical Report on Central Bank Gold Reserves" released on November 4th showed that central banks made net purchases of 39 tons of gold in September, the highest monthly level this year. Brazil led the pack with 15 tons of purchases, followed by Kazakhstan and Guatemala, bringing their year-to-date net purchases to 200 tons.
Technical Analysis
The 4-hour chart for gold shows prices trending slightly lower within a familiar range, with bears attempting to regain control of the short-term trend. Gold is currently testing the 50-period simple moving average (SMA) on the 4-hour chart.
On the upside, bulls need to overcome the resistance zone of $4,020-$4,050, which has successfully suppressed gold's upward attempts in several recent trading sessions. A clear breakout above this level could trigger further buying, pushing gold towards the $4,100-$4,150 area.
On the downside, the 50-period simple moving average at $3,985 is currently providing immediate support. A sustained break below this level could trigger new selling pressure, potentially pushing prices down to the $3,900 support level – a level where bargain hunting has previously held off the bears.
The Relative Strength Index (RSI) has risen back above the 50 midline, indicating improved bullish momentum, but has not yet given a clear breakout signal.
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