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Gold (XAUUSD) is holding firm near recent highs as macroeconomic risks and policy expectations continue to support the bullish case. The ongoing U.S. government shutdown has increased uncertainty around fiscal stability and key data releases. At the same time, weak consumer sentiment and rising rate cut expectations are driving renewed demand for gold. This backdrop continues to favour gold as investors seek stability in a weakening economic environment.

Gold Supported by Macroeconomic Stress and Fed Rate Cut Bets
 

Gold continues to find support from persistent macroeconomic stress. The prolonged U.S. government shutdown has intensified worries about data delays, fiscal paralysis, and broader economic strain. Concerns are rising that the ongoing shutdown could weaken consumer confidence, freeze government spending, and delay key economic releases. This heightened uncertainty continues to strengthen demand for safe-haven assets like gold.

Additionally, soft economic indicators are shaping market expectations. The University of Michigan’s Consumer Sentiment Index fell sharply to 50.3 last week, marking its lowest level since mid-2022. The decline reflects deepening concerns over inflation, job stability, and future income. As confidence weakens, doubts about the strength of the U.S. recovery are growing. This environment favours non-yielding assets like gold, which typically gain when trust in the broader economic outlook weakens.

Meanwhile, growing expectations of a December rate cut are adding strength to gold’s upward momentum. The CME FedWatch Tool now shows over a 60% probability of easing, signalling a likely shift toward looser monetary policy. Declining interest rates make non-yielding assets like gold more attractive. With the Fed signalling a more dovish stance and upcoming data likely to confirm further weakness, markets are preparing for additional easing. As a result, commentary from Fed officials will be closely monitored for clues on the timing and scale of future cuts.

Gold Approaches Major Resistance after Series of Bullish Breakouts
 

The gold chart below shows a well-defined breakout structure. Since 2023, price action has followed a recurring pattern of consolidation phases followed by sharp upward moves. These zones formed horizontal ranges that held for weeks or months, creating solid bases for each advance. Gold responded to each breakout with a swift rally, marked by high volume and strong bullish follow-through. This sequence has shaped a steady and orderly uptrend.
 

Since the start of 2023, gold has staged multiple breakouts, clearing at least four key consolidation areas by mid-2025. Each move triggered a vertical price surge, pointing to strong institutional participation. The breakouts unfolded in a steady sequence, highlighting the trend’s technical discipline and structural clarity. After each breakout, the prior consolidation zone acted as a new support base, further strengthening the bullish pattern.

Gold is currently trading just below a major horizontal resistance zone. This key barrier marks the next hurdle in the ongoing uptrend, and a breakout is needed to confirm the next stage of the rally. If price clears this level, it could trigger another strong advance, consistent with earlier breakout sequences. Until then, the zone remains a critical technical ceiling and a key reference point for market participants.

Gold Outlook: Bullish Structure Intact as Policy Risks Persist
 

Gold remains well-positioned for further gains, supported by macro uncertainty and dovish policy expectations. The prolonged U.S. government shutdown and weak consumer sentiment continue to drive safe-haven demand. Meanwhile, growing expectations for a December rate cut are making gold more attractive as yields decline. Although near-term gains face resistance and limited momentum, the overall trend remains bullish. A confirmed breakout above the current ceiling could trigger the next advance in gold’s ongoing bullish cycle. 

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