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Gold (XAUUSD) is trying to recover after a sharp correction from record highs. The ongoing U.S. government shutdown has disrupted key data releases and added pressure on the Dollar. These factors have revived safe-haven demand and offered short-term support. At the same time, easing geopolitical tensions have reduced defensive positioning. As a result, gold now trades in a zone shaped by political risk, limited data flow, and shifting Fed expectations.
 

Gold Benefits from Policy Confusion and Lack of Economic Visibility

Gold is attempting to stabilize after a steep correction, with price showing early signs of recovery. The move comes as the US government shutdown stretches into its fourth day, fueling fresh concerns over economic disruption. Despite progress on five bills, the decision to exclude Homeland Security funding prolonged the standoff. This renewed uncertainty has revived safe-haven flows, offering near-term support to gold.

The shutdown has also disrupted key economic data releases, adding to market uncertainty. The Bureau of Labor Statistics confirmed that the January jobs report will not be published as scheduled. Meanwhile, the JOLTS job openings survey has also been delayed. These missing data points limit visibility into labor market conditions. Since Fed policy decisions rely heavily on employment trends, the delays could disrupt expectations around upcoming rate decisions. This uncertainty may weigh on the US Dollar and provide near-term support for gold.

The US Dollar is also under pressure as risk sentiment improves. Tensions between the US and Iran have eased, with Iranian officials signaling openness to talks and President Trump hinting at diplomatic progress. At the same time, the US finalized a long-awaited trade agreement with India, lowering import tariffs and boosting market confidence. These developments have reduced global tensions and decreased the urgency for defensive positioning. However, renewed uncertainty around US governance and disrupted data flow continues to limit downside pressure on gold.
 

Gold Rebounds from Trendline Support Following Steep Pullback from Highs

The gold chart below shows a strong initial uptrend, marked by a consistent series of higher lows along a clearly defined ascending trendline. Momentum accelerated once gold broke out of multiple rounded base formations, which acted as bullish continuation setups. Throughout the climb, price respected the trendline, confirming it as a reliable structural support zone.
 

(Click on image to enlarge)

After a vertical breakout, gold climbed to a peak near $5,600 before encountering heavy selling pressure. The sharp decline cut through the ascending trendline zone and briefly slipped below its lower boundary. However, price quickly rebounded and closed back above the trendline, indicating that structural support remains intact for now.

This rebound from trendline support highlights the ongoing battle between bullish momentum and short-term correction. As long as gold holds above this key trend zone, the broader uptrend remains valid. However, a clean break below the trendline would increase the likelihood of a deeper retracement toward previous consolidation areas.
 

Gold Outlook: Shutdown Risks, Data Delays, and Trend Support Shape Near-Term Path

Gold remains in a fragile recovery phase, supported by political gridlock, delayed economic data, and Dollar weakness. The bounce from trendline support signals resilience, but uncertainty around Fed policy and the ongoing shutdown keeps the outlook fluid. As long as gold holds above key structural levels, the broader uptrend stays intact. However, the lack of data visibility and shifting risk sentiment will likely drive short-term volatility. 

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