Date: November 5, 2025
Author: Naveed Anjum – Market Analyst GoldFxPro
Gold rises toward $3,970 as fears of a prolonged US government shutdown and market volatility boost safe-haven demand. Traders eye ADP jobs data for fresh clues on Fed policy.
Introduction
Gold price is rising again as fears of an extended US government shutdown & global market volatility revive safe haven demand. The yellow metal traded near $3,970 in the early European session on Wednesday, recovering from a one-week low. Bargain hunters are stepping in, while investors brace for the US ADP private jobs data later today, which could shape expectations for the next Federal Reserve (Fed) move.
1.Government Shutdown Deepens Fuels Gold’s Recovery
The ongoing US federal government shutdown, now in its sixth week, has officially become the longest in history. The political deadlock between Democrats and Republicans continues to weigh on market confidence, stalling the release of key government data and clouding the Fed’s policy outlook.
As essential operations freeze, concerns over the economic fallout are mounting. Air travel disruptions loom large as federal employees, including air traffic controllers, miss their paychecks. Such real-world consequences are pushing investors toward the safety of gold, a traditional hedge during political and fiscal crises. (Source: Reuters)
2.Dollar Strength Caps the Upside
Despite the risk-off tone gold’s upside remains constrained by a strong US Dollar, which hovers near a three-month high. The Fed’s October rate cut bringing the benchmark to 3.75%–4.0% was accompanied by a cautious tone from Chair Jerome Powell, who warned that another cut this year is not a foregone conclusion.(Source: Bloomberg)
The market has since scaled back rate-cut expectations, pricing in roughly a 69–70% chance of another reduction in December, down sharply from over 90% last week, according to the CME FedWatch Tool.
A firm dollar makes gold more expensive for overseas buyers, reducing demand. Still, the longer the shutdown lasts, the higher the odds of economic disruption which could eventually weaken the dollar and lift gold again.
3.Broader Market Mood AI Stocks, Risk Sentiment, and Geopolitics
Investor mood remains fragile after a sharp selloff in AI-related tech stocks earlier this week. US and Asian equities tumbled as warnings from top banking executives at the Global Financial Leaders’ Investment Summit in Hong Kong spooked markets.
Morgan Stanley’s Ted Pick and Goldman Sachs’ David Solomon both signaled caution, warning of potential sharp drawdowns due to overvalued sectors and tightening liquidity. Meanwhile, JPMorgan CEO Jamie Dimon reiterated that markets may be underestimating risk.
The Nasdaq fell over 2% on Tuesday, dragging global markets lower. Asian indices like the Nikkei and KOSPI lost nearly 3%, reflecting broad risk aversion. Despite this, gold’s rise alongside equities suggests it’s not purely a panic bid but part of a broader realignment where investors seek balance between safety and opportunity.
4.China–US Trade Easing Adds a New Twist
Adding to the complexity, the US and China have taken steps toward easing trade tensions.
- President Trump announced tariff cuts on fentanyl-related imports from China, reducing rates from 20% to 10%.
- China’s Finance Ministry responded by lifting tariffs on US agricultural goods starting November 10.
These moves could help stabilize sentiment in the medium term but may also limit immediate safe-haven inflows to gold.
Separately, China ended a tax exemption for gold retailers, potentially cooling local gold buying a notable development since China remains the world’s top physical gold consumer.
5.Technical Overview: Gold Charts Hint at Tight Range Before Breakout
Gold’s technical structure shows consolidation within a bullish channel. The metal is currently trading near $3,970, supported by its 100-day Exponential Moving Average (EMA).
- Immediate Support: $3,940, followed by $3,835 (lower Bollinger Band)
- Resistance Levels: $4,000 (psychological), $4,046 (October 31 high), and $4,155 (October 23 high)
- Bias: Neutral-to-Bullish
The 14-day RSI sits around the midline, suggesting neither side has strong control. A daily close above $4,045 could trigger a renewed rally toward $4,150–$4,180, while a drop below $3,850 may invite a test of $3,720.
Chart patterns also indicate a tightening wedge, hinting that a breakout could occur soon possibly driven by today’s ADP employment report or upcoming ISM Services PMI data.
6.Fundamental Link: US Debt and Gold’s Long-Term Path
The correlation between US national debt and gold prices remains exceptionally strong. With total US debt now surpassing $38 trillion and growing at nearly 7% annually, gold’s long-term bullish case strengthens.
This relationship underscores gold’s role as a hedge against excessive debt and fiat currency dilution. Simple math suggests that a 10% rise in gold toward $4,400 per ounce remains realistic within the next phase of the debt cycle.
7.What Traders Should Watch Next
- US ADP Employment Report: Expected +25K jobs. A stronger reading may pressure gold briefly; a weak print could revive rate-cut bets and push gold above $4,000.
- ISM Services PMI: Forecast at 50.8. Any downside surprise could trigger a safe-haven rally.
- US Treasury’s Quarterly Refund Announcement: May influence liquidity and bond yields.
- Shutdown Negotiations: Political stalemate will continue to drive safe-haven sentiment.
Source Links:
Reuters | Bloomberg | FXStreet | Investing.com | TradingEconomics
Gold (XAUUSD) Forecast – November 5, 2025
Current Price: around $3,975
Quick Picture (What I See)
Gold is showing a classic mid-range pause inside a broader downtrend channel. After failing to hold above $4,000 last week, price pulled back sharply and found a temporary floor near $3,910–$3,885. Buyers have stepped in around that green accumulation zone, but momentum is still soft as the metal trades below descending trendline resistance.
The 1-hour chart shows lower highs and lower lows since the $4,080 peak, meaning short-term structure remains bearish. Bulls are trying to build a base above $3,950, yet every rally near $4,000 is being sold. This is a grind zone where both sides are active smart traders are waiting for clean confirmation before committing size.
Key Support & Resistance (Levels to Watch)
| Zone | Level | Explanation |
|---|---|---|
| Major Resistance | $4,045 – $4,080 | Trendline + previous supply zone where sellers dominated. |
| Resistance 2 | $4,015 – $4,030 | Small consolidation block before the last drop; intraday selling pressure often reappears here. |
| Resistance 1 | $3,995 – $4,000 | Round number psychological level; short-term sellers are active here. |
| Immediate Resistance | $3,975 – $3,985 | Current testing zone; first barrier for bulls attempting a breakout. |
| Pivot Area | $3,945 – $3,955 | Neutral area where volume frequently spikes; base for short-term decisions. |
| Support 1 | $3,910 – $3,925 | Previous low and demand zone where volume picked up again. |
| Support 2 | $3,875 – $3,885 | Strong buying zone seen on last rebound; “green box” accumulation area. |
| Support 3 | $3,835 – $3,855 | Last defense before the deeper correction toward $3,800. |
Trade Ideas
Setup A Momentum Long (Only if Breakout Holds Above $3,985)
- Plan: Trade bullish breakout if price closes above descending trendline and $3,985 resistance.
- Entry: Buy around $3,990 – $3,995 after a confirmed 1H close above.
- Stop Loss: $3,955 (below breakout base).
- Take Profit 1: $4,025
- Take Profit 2: $4,060 – $4,080
- Risk/Reward: 1:2.2
- Why: Break above short-term resistance could trigger momentum buying, especially if USD weakens or yields cool off. Market has been compressing; breakout volume will confirm direction.
Setup B – Fade / Short at Resistance ($4,000 – $4,030)
- Plan: Sell into rejection from resistance if price fails to sustain above $4,000.
- Entry: Sell near $4,015 – $4,025 after a bearish 1H rejection candle.
- Stop Loss: $4,055 (above supply zone).
- Take Profit 1: $3,960
- Take Profit 2: $3,920 – $3,900
- Risk/Reward:1:2.5
- Why: Downtrend structure still intact; sellers defending lower highs. The $4,000–$4,030 region has consistently capped price. Until bulls break structure, fading this area offers favorable odds.
Short-Term Forecast (Next 24–72 Hours)
- If Fed or USD outlook turns dovish:
Gold can bounce strongly above $4,000 toward $4,045–$4,080. A close above that level could open the door to $4,120 and potentially shift short-term sentiment bullish. - If neutral or cautious:
Expect range trading between $3,925 and $4,015. Traders will likely fade both edges until a clear breakout forms. Momentum EAs may struggle in this zone, so scalping near support/resistance works best. - If hawkish or yields rise again:
Pressure may resume toward $3,885 and possibly $3,850. Watch for a strong red hourly candle closing below $3,910 that would confirm a breakdown and continuation of the lower-high structure.
Summary:
Gold is currently coiled in a tight range under $4,000. Tonight’s direction will decide if this is just a pause before another push up, or the start of a deeper correction toward $3,850.
My Personal Thoughts
This rally feels more like a pause before a bigger move. Gold is showing resilience each dip near $3,900 is attracting quiet buyers. The longer the US shutdown drags on and liquidity tightens, the more likely gold breaks above $4,000 for good. I still see $4,400 as a realistic medium-term target as macro stress builds.
Why is gold rising today
Gold is gaining due to safe-haven demand as the US government shutdown deepens, creating uncertainty across financial markets.
What key events are driving the gold market now
Investors are watching the ADP jobs report, ISM Services PMI, and Fed comments for clues about future rate cuts.
How does the US dollar affect gold prices
A strong dollar typically limits gold’s upside because it makes the metal more expensive for foreign buyers.
What are the next key levels for gold
Immediate resistance lies near $4,000, while support is around $3,850. A breakout above $4,045 could push prices toward $4,150–$4,180.
Is the long-term outlook for gold still bullish
Yes. Rising US debt, tight liquidity, and persistent geopolitical risks continue to support gold’s long-term bullish trend.
