Highlights:
- Gold trades near $4,150 as the US Dollar weakens.
- Fed rate cut expectations continue to support gold prices.
- US-China trade tensions ease ahead of potential deal talks.
- Traders await US CPI data due Friday for inflation cues.
- Key support seen at $4,000; resistance at $4,140 and $4,330.
Gold prices rose during early European trading on Wednesday, hovering near $ 4,150. The precious metal gained as traders remained cautious about the ongoing US government shutdown and growing global debt concerns.
Expectations that the US Federal Reserve may deliver another quarter-point rate cut in its October policy meeting supported the yellow metal. Lower interest rates usually reduce the cost of holding non-yielding assets like gold, making them more attractive to investors.
However, easing tensions between the US and China limited gold's upside. Both countries are working toward a trade agreement before the November 1 tariff deadline, which has slightly reduced safe-haven demand for gold.
Investors are now waiting for the release of the US Consumer Price Index (CPI) inflation data for September, scheduled for Friday (24). Due to the government shutdown, this report is expected to attract strong market attention despite limited data. Economists anticipate both headline and core CPI to rise by 3.1 per cent year-on-year. A higher-than-expected reading could strengthen the US dollar and pressure gold prices.
The US government shutdown entered its fourth week after the Senate again failed to pass a funding bill. Meanwhile, US President Donald Trump softened his earlier threat to impose 100 per cent tariffs on China, suggesting he was open to improving relations with Beijing. He also predicted a “good deal” might result from his next meeting with Chinese President Xi Jinping, though he admitted the talks may not happen soon.
US Treasury Secretary Scott Bessent is expected to meet Chinese officials to discuss ways to reduce trade tensions. Markets are currently pricing in a 99 per cent chance of another Fed rate cut next week, followed by another one in December, according to the CME FedWatch tool.
On the technical side, gold remains in positive territory, staying above its 100-day Exponential Moving Average. The near-term momentum is neutral, with the Relative Strength Index (RSI) around the midline. The immediate resistance is seen at $4,140, with further upside potential toward $4,330 and then $4,380, which marks the all-time high zone.
On the downside, the key support lies at the $4,000 psychological level. Below that, additional support levels are at $3,947 and $3,838, the lows from earlier in October.
