Photo by Peter Olexa on Unsplash
 

Gold (XAUUSD) is holding firm near key levels as global uncertainty drives demand for safety. Political risks, economic slowdown fears, and legal questions around trade policy are shaking investor confidence. At the same time, labor market stress and rising expectations of U.S. rate cuts are weakening the Dollar. Meanwhile, a major technical breakout has confirmed the start of a new long-term trend. These factors point to a bullish outlook for gold in the weeks ahead.
 

Gold Strengthens as Policy Risks, Weak Labor Data, and Fed Shift Boost Safe‑Haven Demand

Gold benefits from persistent macro risks that continue to unsettle markets. The prolonged U.S. government shutdown has entered its 38th day, raising concerns about economic disruption. The Congressional Budget Office estimates that GDP could contract by up to 2% in Q4 if the impasse continues. This adds to fears of a broader slowdown and prompts investors to seek refuge in hard assets like gold.

At the same time, legal uncertainties over U.S. tariffs have emerged as a fresh catalyst. The Supreme Court recently challenged the scope of presidential powers under the 1977 emergency law. The outcome could reshape U.S. trade policy and global supply dynamics. Markets are responding with caution, rotating into defensive positions. This change in outlook boosts gold’s appeal as a reliable shield against policy risk and global instability.

Moreover, labor market weakness further supports the case for rate cuts. October data showed a net job loss across the U.S. economy, including 9,100 private sector jobs and over 22,000 government payrolls. The unemployment rate is ticking higher. These signals raise the probability of easing by the Federal Reserve. According to CME FedWatch, the odds of a December rate cut have jumped to 67%. This shift in expectations continues to weaken the Dollar and boost gold’s appeal as a safe-haven asset.

Gold Breaks Multi-Decade Resistance with Long-Term Support Driving the Uptrend

The gold chart below shows a historic breakout above a multi-decade resistance line that had capped advances since 2011. This green resistance line repeatedly capped gold’s rallies during previous bull phases. However, gold decisively cleared this level in early 2024, marking a structural breakout and shifting the long-term trend.
 

(Click on image to enlarge)

Notably, this breakout aligns with a large cup-shaped base that built over an extended period. The formation established a solid base that supported the breakout. Once the breakout occurred, gold accelerated rapidly, with price action gaining strength over time. The sharp upward moves point to rising momentum and mounting interest from institutional capital.

Importantly, the uptrend is supported by a long-term rising support line that dates back to the early 2000s. The trendline has provided reliable support during each correction, helping maintain the long-term bullish structure. Gold continues to trade well above this rising base, highlighting the strength of the move. Breaking above $3,500 has validated the bullish structure, setting sights on the next upside target between $4,400 and $5,000.
 

Conclusion: Gold Outlook Remains Bullish as Technical and Macro Drivers Align

Gold remains in a strong position as both technical and fundamental factors align in its favor. The confirmed breakout above long-term resistance, combined with safe-haven demand and rising rate cut expectations, continues to drive bullish momentum. Political gridlock, labor market stress, and legal uncertainty are fueling defensive flows. At the same time, institutional interest is growing as gold holds above key support levels. With upside targets now in focus, the broader outlook points to continued strength in gold. 

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