By Antonio Di Giacomo, Senior Market Analyst at XS.com
Gold prices remain around $4,000 per ounce, showing little movement in recent days amid the absence of clear catalysts pushing the metal higher or lower. Markets have stayed cautious amid the prolonged U.S. government shutdown, which has limited the release of new economic data and created an atmosphere of waiting rather than action.
Investors are still digesting the restrictive message from the U.S. Federal Reserve (Fed). Chairman Jerome Powell dismissed the possibility of a rate cut in December, which boosted the U.S. dollar and, in turn, kept pressure on equities that continue to trade in a mixed manner. A stronger dollar tends to make gold more expensive for holders of other currencies and reduces its appeal as an alternative asset.
On the macroeconomic front, data present a mixed picture: the S&P Global Manufacturing PMI exceeded expectations at 52.5 (above the 50 expansion threshold). At the same time, the Institute for Supply Management (ISM) index fell to 48.7, confirming contractions in parts of the manufacturing sector. This contrast highlights a divergence in the economic drivers that usually support gold as a haven amid global weakness.
The U.S. government shutdown adds another layer of uncertainty to the market. The lack of key employment and economic data releases has heightened investor caution. This week, attention will focus on the ADP employment report, one of the few releases still expected despite the federal shutdown. However, while this figure may generate some movement, it is unlikely to trigger a fundamental shift without other supporting factors.
Regarding gold, although it is often cited trading around $4,000, it is essential to note that most analysts project that level as a target for 2026, not the current price. For example, Deutsche Bank raised its 2026 gold forecast to $4,000 per ounce, citing a mix of dollar weakness, official purchases, and a more distant rate-cutting cycle than previously anticipated. Similarly, J.P. Morgan expects the metal to average around $3,675 in Q4 2025 and rise to $4,000 by Q2 2026.
However, the factors that could support gold, such as Fed rate cuts, a sharper dollar decline, persistent inflation, or renewed geopolitical tensions, are not currently strong enough to move the needle. As such, gold is behaving more like a “holding asset” than a high-conviction short-term trade.
For investors interested in gold, the recommendation is to maintain moderate positions in a diversified portfolio, without expecting an immediate rally. The environment calls for patience and close monitoring of potential catalysts: key economic data, monetary policy decisions, geopolitical developments, or an inflation surprise could all provide the next significant push.
In conclusion, gold remains in a consolidation phase around $4,000 per ounce, lacking clear stimuli to drive a decisive move up or down. The dollar’s strength following the Fed’s restrictive tone, coupled with the absence of fresh data due to the government shutdown, keeps the metal in limbo. Nevertheless, forecasts for 2026 maintain a bullish bias, and gold could benefit if the right catalysts emerge. In the meantime, investors would do well to stay alert before taking more aggressive positions.