Gold Forecast: Declines Amid Dollar Recovery, Shutdown Deal

• Gold forecast shows a slight bearish bias amid renewed investor confidence and optimism around the US shutdown.

• The non-yielding gold remains supported by expectations of Fed easing and US economic worries. 

• Traders await commentary from FOMC officials for further impetus regarding Fed easing. 

Gold forecast shows a short-term bearish pullback, as it trades near $4,115 on Wednesday, snapping its 3-week rally amid a strengthened greenback. The expectations of the US government reopening have lifted the risk-on mood, weighing on the yellow metal. 

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Markets are pricing in a 68% probability of a 25 bps December cut. However, some market participants are expecting a 50 bps cut instead. The Fed’s dovish expectations have suppressed the yields, supporting non-yielding assets such as gold. 

However, the US dollar faces a modest recovery due to the optimism around the end of the federal shutdown that boosted investor confidence and appetite for risk assets. This risk-on tone caps gold’s further upside in the near term. 

Markets maintain a cautious stance over speculations that the shutdown could have weakened the US economy, pressuring the Fed to deliver a December rate cut. Recent data from Revelio Labs revealed a loss of more than 9,000 private jobs in October. Moreover, a decline of 22,000 government payrolls and a rise in unemployment reignite the Fed’s dovish stance.  

While today’s lows reflect reduced safe-haven demand for gold and a limited dollar strength, the ongoing US economic decline and Fed cuts support gold in the medium term. 

Gold Daily Key Events

The significant events in the day include:

• FOMC Member Williams Speaks
• FOMC Member Paulson Speaks
• FOMC Member Bostic Speaks
• FOMC Member Miran Speaks
• FOMC Member Waller Speaks

On Wednesday, traders look ahead to speeches from FOMC officials Williams, Paulson, Miran, Waller, and Bostic for insights into further rate-cut bets. However, major event for the week remains US CPI due tomorrow.

Gold Technical Forecast: Consolidating Pullback Near $4,115

Gold’s 4-hour chart shows a consolidation above $4,100 after breaking its 3-week rally. The 20-, 50- and 100-period MAs remain below the price, suggesting a firm broader trend. 

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The RSI holds near 60.0, indicating the momentum eases without a clear sign of trend reversal. If buyers break above $4,155, they could aim for $4,190 and $4,275, continuing the further uptrend. On the contrary, a failure to hold above $4,100 could invite deeper pullbacks. 

Support Levels

• $4,100
• $4,045
• $4,025

Resistance Levels

• $4,155
• $4,190
• $4,275

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