The Fed's Dilemma! US Shutdown Begins to Shake the Economy, Gold Becomes the Main Refuge?
Global gold prices rose again in trading on Monday (November 10th), driven by increased demand for safe-haven assets and market expectations that the Federal Reserve (The Fed) will soon cut interest rates in the coming months. The price strengthening was also supported by the limited weakening of the US dollar and US bond yields, which have begun to decline from their highs. These conditions make gold more attractive to investors seeking a hedge against inflation and global economic uncertainty.
Several analysts stated that the fundamental outlook for gold remains positive amid the increasingly pronounced US economic slowdown due to the impact of the partial government shutdown. The shutdown has caused delays in public projects, disruptions in administrative services, and heightened investor concerns about US fiscal stability. "The market is starting to consider a soft landing scenario, where inflationary pressures subside but growth also slows—ideal conditions for gold to remain at high levels," said analysts from FXStreet in their report. Meanwhile, investors are also monitoring geopolitical developments in the Middle East and China's stimulus policies, which have the potential to increase demand for precious metals.
Technically, the spot gold price (XAU/USD) is currently trading around US$4,050 per troy ounce, with strong support at US$3,950 and resistance at US$4,050–4,070. The Relative Strength Index (RSI) indicator is at a neutral level of around 53, indicating the market is awaiting further direction. If gold can break through the resistance area and hold above US$4,050, the potential for further strengthening towards US$4,100 is wide open. Conversely, a decline below US$3,950 could trigger a correction towards US$3,900.
Overall, the medium-term trend for gold remains bullish, although in the short term, the market has the potential for consolidation. Market participants are advised to closely monitor the movement of the US dollar, developments in the fiscal crisis in Washington, and statements by Fed officials ahead of the release of inflation data next week, which could determine gold's future direction.
Source: Newsmaker.id
