Gold prices fell slightly on Wednesday, trading below $4,100 in the Asian session. The drop came after a strong nine-week rally, as traders booked profits following record highs. Despite the recent correction, many analysts believe gold’s long-term outlook remains positive.
The easing tension between the United States and China also reduced demand for safe-haven assets like gold. Both countries are reportedly working on a new trade understanding ahead of the November 1 tariff deadline, which helped calm market nerves.
However, worries about the ongoing US government shutdown and global debt concerns continue to provide some support to gold. Additionally, investors are expecting the Federal Reserve (Fed) to deliver another 25-basis-point rate cut later this month. Lower interest rates typically make non-yielding assets like gold more attractive, as they reduce the opportunity cost of holding them.
In forex trading, the US Dollar remains under slight pressure due to policy uncertainty and delayed economic reports. This weaker greenback also helps limit gold’s downside movement.
Looking ahead, traders are watching the upcoming US Consumer Price Index (CPI) data, which is due Friday. Both headline and core inflation are expected to rise by 3.1% year-on-year for September. A higher reading could strengthen the dollar and weigh on gold in the short term.
For now, key support for gold lies near $4,000, while resistance is seen around $4,140. Market participants expect some consolidation before the next big move in gold trading as global uncertainty and Fed rate expectations continue to drive sentiment.
