Gold Consolidates Before Breakout
Gold remains steady just below its all-time high of $3,973, supported by a cautious market mood during Tuesday’s European session. The precious metal is trading near $3,960, with downside attempts consistently held above the $3,940 mark.
Political and fiscal instability following Takaishi’s victory in Japan and the resignation of France’s Prime Minister Lecornu has shaken investor confidence in the Euro and Yen. In contrast, gold has strengthened due to its safe-haven appeal, especially amid rising global uncertainty.
The technical outlook remains bullish, with price action contained within an ascending channel that began from the late September low of $3,720. The 4-hour RSI has retreated from overbought territory, and the fundamental backdrop continues to support further upside.
Should a bearish reaction occur from current levels, initial support lies at the intraday low of $3,940. Below that, the previous resistance zone around $3,790 (September 23 and 26 highs) and the September 28 low at $3,755 could act as key support levels.
Safe-haven demand remains elevated amid the ongoing government shutdown in the United States. Investors are closely watching speeches from several Federal Reserve officials, including Atlanta Fed President Raphael Bostic, Governors Michelle Bowman and Stephen Miran, and Minneapolis Fed President Neel Kashkari. These remarks are expected to provide insight into the labor market and monetary policy outlook, especially in the absence of key economic data releases.
The President of the United States has expressed openness to bipartisan cooperation on healthcare, contingent on the reopening of the federal government. Any prolonged furlough of federal workers poses risks to labor market stability and may further influence currency and commodity markets.