Gold (XAU/USD) is trading sideways in the Asian session on Thursday, consolidating just below the all-time peak reached a day earlier. Market reaction to the partial US government shutdown remains limited, as investors expect minimal economic fallout. This has kept risk sentiment supported and discouraged aggressive safe-haven buying, particularly with gold already in heavily overbought territory.
The yellow metal, however, continues to draw strength from persistent weakness in the US Dollar (USD). Dovish Federal Reserve expectations remain the primary driver after the disappointing US ADP jobs report showed private employers cut 32K positions in September—the sharpest decline since March 2023. August payrolls were also revised down to a net loss of 3K from an initially reported 54K gain, reinforcing speculation of two Fed rate cuts before year-end.
On the other hand, a slight improvement in the ISM Manufacturing PMI—from 48.7 to 49.1 in September—helped the USD bounce from a one-week low on Wednesday, though momentum quickly faded. Meanwhile, escalating geopolitical risks, with Washington preparing to provide Ukraine with intelligence for long-range strikes against Russian energy assets, are lending additional support to gold’s safe-haven appeal.
Looking ahead, traders await Friday’s Nonfarm Payrolls report for fresh direction, though the release could be delayed due to the US shutdown. In the meantime, comments from Fed officials are likely to drive USD sentiment and influence XAU/USD flows in the near term.
Technical outlook: Consolidation before the next move
From a chart perspective, the daily RSI remains deeply overbought, limiting aggressive upside bets for now. Still, the absence of meaningful selling pressure and gold rebound from sub-$3,800 earlier this week reinforce a constructive bias.
Key support is seen near $3,825–$3,820, followed by the $3,800 psychological mark. A decisive break lower could extend losses toward $3,758–$3,757 and eventually the $3,700 handle. On the upside, sustained strength above the recent highs and acceptance beyond $3,870–$3,880 would confirm bullish continuation, keeping the broader uptrend intact.
