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Gold price remains flat on Tuesday after reaching a three-week high of $4,148, but at the time of writing trades at around $4,110 amid a US government reopening looming as the Senate passes the stopgap funding bill, now on its way to the House of Representatives.

Bullion eases from three-week high, traders weigh US government reopening prospects and fading Fed rate-cut bets

The Senate voted 60-40 to pass the bill, which, if approved by the lower house, would keep the government open until January 30 and some agencies through September 30. Some moderate democrats supported Republicans' bill, dropping the demand to renew expiring Affordable Care Act subsidies.

The US economic docket remains scarce amid the ongoing shutdown, yet ADP revealed that private companies slashed an average of 11,250 jobs a week in the four weeks ending October 25.

Consequently, market participants raised their bets on a December rate cut, despite Federal Reserve (Fed) Chair Jerome Powell's remarks stressing that another cut this year is far from certain. As of writing, market players see 67% odds for a rate cut in December, compared to 62% one day earlier, according to the FedWatch Tool.

Daily market movers: Gold consolidates amid dismal US data

• Gold prices edged slightly lower as traders book profits, although the scarce US economic data was dismal. The NFIB Small Business Optimism Index fell in October to 98.2 but stood above the 52-year average of 98. The Uncertainty Index fell 12 points from September to 88, the lowest reading of this year.
• “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits,” said NFIB Chief Economist Bill Dunkelberg. He added, “Many firms are still navigating a labor shortage and want to hire but are having difficulty doing so.”
• The US Dollar Index (DXY), which tracks the performance of the American currency against other six, tumbles more than 0.24% down at 99.37.
• US Treasury yields, with the 10-year Treasury note yield, hold firm at 4.12% as the bond market remains closed in observance of Veterans Day. US real yields — which correlate inversely to Gold prices — are at 1.83%.
• Fed Governor Stephen Miran on Monday suggested that a 50 basis-point cut might be appropriate for December, given the softening labor market and falling inflation.

Technical outlook: Gold price steadies as traders eye daily close above $4,100

Gold’s technical picture remains bullish, yet the uptrend stalled as it is forming a doji, an indication that neither buyers nor sellers are in control. From a momentum standpoint, further Bullion upside is seen, as depicted by the Relative Strength Index (RSI).

If Gold rises above $4,160, the next resistance will be the October 22 high at $4,161, ahead of $4,200. Conversely, a drop below $4,000 would expose the $3,950, followed by the October 28 low of $3,886.

(Click on image to enlarge)

Gold daily chart

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