Gold (XAU/USD) climbed above $4,050 during early European trading on Monday, lifted by doubts over the US economic outlook. Weaker-than-expected US private payrolls and a slump in the University of Michigan Consumer Sentiment Index have pushed investors to ramp up expectations for Federal Reserve rate cuts. Lower borrowing costs make non-yielding assets like gold more attractive.
On the flip side, a potential end to the US government shutdown and easing US-China trade tensions could curb gold’s safe-haven appeal in the near term. Lawmakers are voting on a funding deal this week that would reopen federal agencies and end the longest shutdown on record.
Key Data to Watch This Week
- Thursday: US October Consumer Price Index, with headline inflation forecast up 0.2% month-on-month and core inflation up 0.3%.
- Friday: US retail sales, another gauge of consumer demand.
Daily Digest – Market Movers
- The Senate adjourned until 11 a.m. Monday, then plans to resume debate on the government funding bill after a breakthrough late Sunday. House Democratic leaders have signaled votes later this week, giving members at least 36 hours’ notice amid travel disruptions.
- Bloomberg reports a centrist group of Senate Democrats will back a short-term funding package that reopens the government, restores back pay for furloughed staff, and funds some departments through Jan. 30 and others for a full year.
- China’s Ministry of Commerce announced a temporary lift on export bans for certain “dual-use” materials—gallium, germanium, antimony and others—to the US, effective immediately through Nov. 27, 2026. This follows Friday’s easing of curbs on some rare-earth metals and lithium battery components.
- The University of Michigan’s Consumer Sentiment Index fell to 50.3 in November—the weakest since June 2022—below October’s 53.6 and the 53.2 consensus.
- CME FedWatch shows roughly a 66% chance of a 25 basis-point Fed rate cut in December.
Technical Outlook – Bullish Above the 100-Day EMA
Gold remains firmly above its 100-day exponential moving average, with the 14-day RSI hovering near 55—both signs of positive momentum. A sustained move above the Oct. 22 high of $4,161 could target the $4,200 psychological level, with the upper Bollinger Band near $4,325 as the next resistance. Conversely, a drop below $4,000 may prompt a retest of the lower Bollinger Band around $3,835 and the 100-day EMA near $3,705.
