Gold (XAU/USD) trims earlier losses on Tuesday, trading around $3,847 at the time of writing. The metal is regaining ground after dipping toward the $3,800 mark earlier in the day, recovering from a sharp intraday pullback from a fresh all-time high near $3,871, as buyers stepped back in following softer US Consumer Confidence data and a muted reaction to the latest JOLTS Job Openings report.

Despite the sharp intraday drop, Bullion's near-term floor appears firm, supported by investor demand for safe havens amid the growing risk of a United States (US) government shutdown, should lawmakers fail to strike a funding deal before Tuesday at midnight. At the same time, ongoing geopolitical frictions continue to underpin Gold's appeal as a go-to safe-haven asset, while renewed US tariffs stir concerns over global trade, reinforcing demand for the yellow metal as a hedge against uncertainty.

Moreover, investors are increasingly pricing in higher odds of further Federal Reserve (Fed) interest rate cuts, which lowers the opportunity cost of holding non-yielding Bullion. Against this backdrop of risk aversion and expectations for easier monetary policy, the broader outlook for Gold remains constructive, even as the market digests the latest round of profit-taking.

Market movers: Risk sentiment cautious amid US shutdown, global tensions
US data offered limited support to the Dollar, as the Conference Board's Consumer Confidence Index fell to 94.2 in September from a revised 97.8 in August, while JOLTS Job Openings for August rose slightly to 7.23 million from 7.21 million in July, broadly matching expectations.

US shutdown fears grow as a White House meeting on Tuesday between President Donald Trump and congressional leaders ended without any breakthrough, leaving the government on track for a potential shutdown from Wednesday unless lawmakers strike a last minute deal. Following the meeting, Vice President JD Vance warned the government is "headed to a shutdown", accusing Democrats of holding the government "hostage" over their spending demands and urging them to agree to a deal without conditions.

The looming shutdown threatens to disrupt key US economic data releases, with the Bureau of Labor Statistics (BLS) confirming on Monday that it would suspend operations and not release economic data during a government shutdown. This means the Nonfarm Payrolls (NFP) report, due Friday, will not be released if the shutdown proceeds. The shutdown could also delay the monthly Consumer Price Index (CPI) report scheduled for October 15, complicating the Fed's efforts to assess the inflation and labor market outlook, and potentially weighing on the broader economy if the shutdown extends.

Source: Fxstreet