Gold gained ground in the North American session on Tuesday, though it remained just below its intraday record high of $3,871 set earlier in Asia. Mounting concerns over a potential US government shutdown and softer economic data have bolstered expectations of Federal Reserve (Fed) rate cuts, pushing XAU/USD to $3,846, up 0.35%.
Bullion steadies as dollar weakness supports safe-haven demand
The latest Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics (BLS) showed vacancies rising slightly in August, exceeding forecasts. However, the Conference Board’s Consumer Confidence index fell to 94.2 in September from 97.6 in August, signaling growing pessimism about current business conditions and the labor market.
The dollar’s weakness has underpinned bullion’s rally, with the looming risk of a government shutdown adding to safe-haven demand. US President Donald Trump said he had constructive talks with Democratic leaders Chuck Schumer and Hakeem Jeffries but warned that a shutdown remains likely. A shutdown would also delay the release of key labor market data, according to the BLS.
Markets are pricing in a 96% probability of a 25-basis-point rate cut at the Fed’s October 29 meeting, with just a 4% chance of rates being held steady. Attention now turns to upcoming US data, including ADP employment, ISM Manufacturing PMI, initial jobless claims, and Friday’s September nonfarm payrolls.
Daily market movers: gold rally extends as greenback slides
The US Dollar Index (DXY), which tracks the greenback against six major peers, slipped 0.17% to 97.78, further boosting gold. Treasury yields were steady, with the 10-year note holding at 4.146% and real yields unchanged at 1.796%.
JOLTS data showed job openings edging up from 7.21 million to 7.23 million in August, but the hiring rate declined to 3.2%, the lowest since June 2024, while layoffs remained subdued. Separately, consumer confidence fell short of expectations, marking its weakest reading since April 2025.
Fed officials struck a cautious tone. Vice-Chair Philip Jefferson highlighted signs of a softening labor market and anticipated disinflation to resume. Boston Fed President Susan Collins said modest rate cuts could be appropriate if conditions warrant, though she expects inflation to remain elevated into 2026. Chicago Fed President Austan Goolsbee noted tariff risks and warned that persistent inflation would complicate policy decisions.
Technical outlook: gold price eyes $3,900
Gold’s uptrend remains intact, with XAU/USD trading above $3,850 but still shy of the $3,871 peak. The Relative Strength Index (RSI) is overbought, hovering between 70 and 80, yet continues to reflect bullish momentum.
A clear move above $3,850 could pave the way for a test of $3,900, followed by $3,950 and the psychological $4,000 level. Conversely, a drop below $3,800 would expose downside risks toward $3,750, then $3,700, with the 20-day Simple Moving Average (SMA) at $3,666 providing additional support.
