- Gold futures slipped after reaching a 3-week top above $4,150.
- Dollar recovery and shutdown resolution ease the safe-haven flows.
- Long-term trend remains bullish for gold amid weaker US economy, pushing for another rate cut this year.
Gold futures slipped in Tuesday’s New York session, snapping a 3-day winning streak, as US government reopening optimism eased the safe-haven demand. The precious metal saw profit-taking after surging to a 3-week top above $4,150.
During today’s Asian session, the gold futures fell to $4,100 area, weighed by a rebound in Dollar Index (DXY), rising 0.1% after 5-day losing streak. The risk sentiment improved as the US Senate advanced the bill to end the record-long government shutdown, a key tail risk for the global economy.
The shutdown resolution boosted equities, while dulled the safe-haven flows. The fiscal drag from the shutdown has already reduced around 2% GDP growth that could reinforce the Fed to cut policy rates in December meeting. Futures markets now price is 64% probability of a 25-bps rate cut. Some analysts point at a larger reduction if upcoming data confirms economic slowdown.
Employment data from private sources continue to reflect the fragility. According to Revelio Labs, 9,100 jobs were lost in October, while government payrolls were reduced by 22,000 positions. The Chicago Fed also revealed a slight uptick in unemployment rate.
Despite this, the momentum for precious metal has cooled, signaling waning near-term bullish energy. The metal has gained 55% YTF, strongest annual yield since 1979, driven by central bank demand, geopolitics, and falling yields. However, short-term traders appear locking profits as risk appetite returns.
Analysts note that the current consolidation could extend but the broad trend stays bullish. According to Hebe Chan, an analyst at Vantage Markets, “The surge above $4,100 revealed underlying unease amid the optimism about the government reopening. Even with risk-on sentiment, the lingering effects of the shutdown and expectations of Fed rate cuts are likely to keep safe-haven interest in gold alive.”
With the US federal government to resume operations fully this week, investors stay focused on delayed economic data, especially employment and inflation, which could set the Fed’s tone into year-end. A weaker data could surge the demand for gold, propelling to its record highs in 2026.
