Select Language

Gold steadies above $3,850 as US shutdown drags on; ISM Services PMI in focus

Breaking news

Gold steadies above $3,850 as US shutdown drags on; ISM Services PMI in focus

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.03 21:14
Gold steadies above $3,850 as US shutdown drags on; ISM Services PMI in focus

update 2025.10.03 21:14

  • Gold holds firm above $3,850 on Friday after Thursday's volatile swings.
  • US government shutdown uncertainty and Fed cut bets keep safe-haven bid intact.
  • Markets focus on the ISM Services PMI as the shutdown stalls the NFP release.

Gold (XAU/USD) stabilizes above $3,850 on Friday, maintaining a steady tone through the European session after dipping to an intraday low near $3,838, as the US Dollar (USD) eases following its modest rebound a day earlier. The metal's steady stance comes after a sharp pullback from record highs during Thursday's volatile session, as traders booked profits following the recent rally.

The broader outlook for Gold remains tilted to the upside, with downside seen as limited, as any pullbacks are likely to attract dip-buying interest, supported by safe-haven demand as the United States (US) government shutdown drags into a third day. Moreover, growing expectations that the Federal Reserve (Fed) will cut interest rates later this month provide an additional tailwind for the metal.

Looking ahead, with the September Nonfarm Payrolls (NFP) report delayed due to the political gridlock in Washington, attention turns to the September ISM Services Purchasing Managers Index (PMI) due later on Friday. Meanwhile, Democratic senator Elizabeth Warren has urged the administration to release the BLS Employment report despite the shutdown, but that seems unlikely to happen.

Market movers: US government shutdown weighs on growth outlook and Fed path

  • Speaking on CNBC's Squawk Box on Thursday, US Treasury Secretary Scott Bessent urged Congress to pass a "clean continuing resolution" to fund the government and cautioned that "shutting down the government and lowering the GDP... could see a hit to the GDP, a hit to growth and a hit to working America."
  • According to a White House memo cited by Politico, the US economy risks losing about $15 billion in GDP each week the government remains closed, while a month-long stalemate could push an additional 43,000 people into unemployment.
  • Chicago Fed President Austan Goolsbee told Fox Business on Thursday that if the shutdown halts official data releases, the Fed will "turn to other data sources" to guide its decisions. He added that the Chicago Fed's real-time indicator points to a steady Unemployment Rate around 4.3% and a generally stable labor market, noting the Fed will "make a decision with the information it has" in the absence of official BLS statistics.
  • Dallas Fed President Lorie Logan struck a hawkish note on Thursday, saying the recent rate cut should be viewed as "insurance" and warning the central bank must be "very cautious about rate cuts" given that inflation remains above target.
  • The Fed faces a murkier outlook as the shutdown disrupts key data releases. Friday's Nonfarm Payrolls (NFP) report is unlikely to go ahead and the September Consumer Price Index (CPI), scheduled for October 15, could also be postponed, leaving policymakers with limited guidance ahead of the October 28-29 FOMC meeting.
  • The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, eased slightly after rebounding from a one-week low on Thursday and was last seen trading around 97.81, remaining under pressure.

Technical analysis: XAU/USD steadies near 21-SMA; dip-buying interest persists

XAU/USD steadies after Thursday's volatile swings with dip-buyers emerging on pullbacks. The $3,860-$3,865 area is acting as immediate near-term resistance with the price testing the 21-period Simple Moving Average (SMA) around $3,859 on the 4-hour chart.

Initial support lies at the intraday low near $3,838, followed by Thursday's trough around $3,820. A decisive break below these levels could invite deeper corrective pressure, though dip-buying interest has remained evident. On the upside, a move above the $3,860-$3,865 barrier would clear the way for a retest of the all-time high near $3,896.

The Relative Strength Index (RSI) also stabilizes after easing from overbought territory and is now hovering just above the neutral level around 55. This suggests the market is taking a breather after recent gains, which could either precede another leg higher or lead to a period of consolidation.

Gold FAQs

Gold has played a key role in human's history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country's solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.


Date

Created

 : 2025.10.03

Update

Last updated

 : 2025.10.03

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Fed's Jefferson nods to risks on both sides of the Fed's mandate

Federal Reserve (Fed) Vice President and Board of Governors member Phillip Jefferson acknowledged that ongoing risks to both sides of the Fed's policy mandates are seeing growing risks.
New
update2025.10.04 03:56

Gold climbs as shutdown fuels haven demand, eyes record high

Gold price advances during the North American session on Friday, up by 0.70% for the day as the US government shutdown extends to three days, poised to end the week positively for the seventh straight week. At the time of writing, XAU/USD trades at $3,882 after hitting a daily low of $3,838.
New
update2025.10.04 03:54

Fed's Logan warns inflation pressures persist, could be made worse

Federal Reserve (Fed) Bank of Dallas President Lorie Logan struck a nervous tone on Friday, warning that despite a rapidly-weakening labor market, a lot of potential policy moves could accidentally spark another round of renewed inflationary pressures.
New
update2025.10.04 03:49

Dow Jones Industrial Average rises 300 points on Friday

The Dow Jones Industrial Average (DJIA) caught a firm bid on Friday, rising 482 points, or 1.04%, bottom-to-top. The Dow briefly pierced the 47,000 major price handle for the first time ever, before easing back to a more sedate +300 points (0.65%) on the day.
New
update2025.10.04 03:44

AUD/USD holds near 0.6600 as Greenback weakens on US shutdown and soft PMI data

The Australian Dollar (AUD) holds modest gains versus the US Dollar (USD) on Friday, supported by a weaker Greenback as the United States (US) government shutdown drags on and the ISM Services Purchasing Managers Index (PMI) softens.
New
update2025.10.04 03:23

EUR/USD holds modest bid amid US shutdown and mixed PMI readings

The Euro (EUR) trades with a modest bid against the US Dollar (USD) on Friday, with EUR/USD stuck in this week's range of 1.1750-1.1700.
New
update2025.10.04 00:38

GBP/USD rises as US shutdown prolongs, Fed data gap grows

The Pound Sterling advances some 0.26% on Friday as the US government began its third day of shutdown and skipped the release of Nonfarm Payroll figures for September. Purchasing Managers Index (PMI), data from S&P Global and ISM in the US, are the main drivers of price action.
New
update2025.10.04 00:36

EUR/JPY rebounds after dip to one-month low

The Euro (EUR) gains traction against the Japanese Yen (JPY) on Friday, recovering after briefly slipping to its lowest level since September 9 on Thursday. At the time of writing, EUR/JPY trades near 173.00, staging a modest rebound from recent lows.
New
update2025.10.03 23:08

Fed's Miran: Inflation expectations are reasonably well anchored

Fed policymaker Stephen Miran stressed the importance of forward-looking analysis in shaping monetary policy.
New
update2025.10.03 22:54

GBP/JPY steadies near 198.00 as Yen weakens, UK PMI signals slowdown

The GBP/JPY steadies on Friday, snapping a four-day losing streak after sliding to its lowest level since August 7 on Thursday. At the time of writing, the cross is holding firm near the 198.00 handle, easing back from an intraday high around 198.55.
New
update2025.10.03 22:16

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel