10/11/25

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Gold prices are currently consolidating following a recent rebound, trading near ten-day highs after briefly surpassing the $4,050 level. This upward momentum is driven by ongoing geopolitical and economic uncertainties, with market participants seeking safe-haven assets amid concerns over the US government shutdown’s impact on the economy.

The US political landscape has temporarily eased some tensions, as Senators reached an agreement to reopen the federal government after 40 days of shutdown. The deal involves an extension of government funding with a future vote on the renewal of enhanced Affordable Care Act subsidies. While this development has bolstered risk sentiment in the markets, investors remain cautious, awaiting confirmation that the legislation will pass through the House of Representatives and be signed into law.

In addition, China’s decision to suspend its export ban on certain dual-use materials to the United States has added to comparatively positive market sentiment. However, uncertainty persists until the legislative process is complete, and economic data releases are resumed, which makes gold an attractive refuge amid the ambiguity. Weakening consumer sentiment, exemplified by a slowdown reflected in recent surveys, along with a spike in corporate layoffs, underscore the fragile economic recovery, further supporting gold’s safe-haven appeal.

Market expectations of a potential interest rate cut by the Federal Reserve in December also support gold’s price. Rising gold holdings by Chinese investors and increased purchases by the People’s Bank of China bolster gold’s appeal as a strategic reserve asset. Chinese gold ETFs surged significantly in the first nine months of the year, signaling strong domestic demand.

Technically, gold’s near-term outlook remains bullish. The daily chart indicates that prices could gain further if they remain above key support levels. An acceptance above the $4,050 level could open the door to re-testing the $4,081 resistance level and beyond, towards the recent high of $4,129. Conversely, a decline below $3,973 would expose potential downside risks.

Gold continues to serve as a vital hedge against inflation and currency depreciation, with central banks increasing their holdings amid ongoing geopolitical uncertainties. Its inverse relationship with the US dollar and US Treasury yields enhances its appeal during periods of market volatility, reinforcing its status as a go-to safe haven.