Gold Price Breaks Above $4,000 as Dollar Weakens, Eyes Key $4046.60 Resistance
Spot gold pushed back above the $4,000/oz threshold on Thursday, supported by a pullback in the U.S. dollar and renewed safe-haven demand driven by ongoing U.S. government shutdown concerns. With bullion now within striking distance of the October 31 main top at $4046.60, traders are closely watching for a potential upside breakout that could open the door to higher retracement targets.
At 14:23 GMT, XAU/USD is trading $3996.40, up $16.28 or +0.41%.
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Dollar Slips, Treasury Yields Dip, Supporting Gold
The U.S. dollar index fell 0.3% after touching a four-month high earlier in the week, offering tailwinds for non-yielding assets like gold. U.S. Treasury yields also declined across the curve, with the 10-year yield down over 5 basis points to 4.106% and the 2-year yield sliding to 3.578%.
A sharp increase in October job cuts, as reported by Challenger, Gray & Christmas, added pressure to yields. Layoffs surged to 153,074 — the highest October print since 2003 — fueling market speculation of softening labor conditions.
UBS analyst Giovanni Staunovo pointed to the dollar weakness and recent U.S. Supreme Court skepticism over Trump-era tariffs as near-term bullish factors for gold. “While near-term prices are likely to consolidate, we expect further Fed rate cuts to lift gold to $4,200 by year-end,” he noted.
Fed Outlook, Shutdown Drive Uncertainty
Despite a stronger-than-expected ADP employment print (+42,000 vs. 28,000 forecast), Fed funds futures have repriced rate cut odds slightly lower. Traders now assign a 63% probability to a December rate cut, down from over 90% a week ago. Still, the ongoing government shutdown — now the longest in U.S. history — and the lack of timely economic data due to the federal stalemate are complicating the policy outlook.
Key Chart Levels in Focus for Gold Traders
Daily Gold (XAU/USD)
Technically, XAUUSD is testing critical resistance at the October 31 main top of $4046.60. A confirmed breakout above this level would validate the recent double bottom at $3928.68 and $3886.46 and put the 50%–61.8% retracement zone between $4133.95 and $4192.36 in play. First sellers may appear at that zone, but a decisive push through $4192.36 could trigger another leg higher.
On the downside, support is firming at the 50-day moving average of $3867.95 and a long-term pivot at $3846.50. As long as price action holds above these markers, the broader bullish trend remains intact.
Gold Price Forecast: Bullish Bias Above $4046.60
With the dollar under pressure and Fed rate cut expectations still elevated, the gold outlook leans bullish in the near term. A clean breakout above $4046.60 could accelerate momentum toward $4133.95 and possibly $4192.36.
However, failure to clear resistance on first test may trigger consolidation. Bulls will want to see the 50-day MA at $3867.95 hold to maintain the uptrend.
Source: Fxempire
