Although gold has corrected recently, it continues to reflect concerns over the Fed’s independence, the possibility of stagflation, and potential geopolitical and international tensions. The pullback is viewed as a necessary reset that clears out some excess.

With what could become the longest U.S. government shutdown on record, official economic releases have been forced to pause. Investors are closely watching unofficial reports, including Wednesday’s ADP National Employment data.

Meanwhile, Fed officials are signaling differing views on how to navigate the current data gap. Governor Lisa Cook said she sees greater risks from further labor-market weakening than from a resurgence in inflation, but she stopped short of committing to support another rate cut in December. By contrast, Governor Milan said policy remains in a restrictive zone and he will continue to advocate for sizable cuts.

Gold hit an all-time high in mid-October but subsequently pulled back on concerns that the rally had run too far, too fast. Year-to-date, gold is still up 53%, but since its October 20 peak it has fallen more than 9%.

After two recent rate cuts, Fed officials will hold their final meeting of the year next month.

Market take:
On the 4-hour chart, gold has been choppy to lower, while MACD lines and histogram below the zero line are gradually converging. Investors are assessing whether the uptrend can restart; the Fed’s policy stance remains one of the key swing factors. Easing U.S. monetary policy would typically enhance the appeal of non-yielding assets such as gold.