Gold (XAU/USD) edges lower on Thursday, after briefly reclaiming the key $4,000 psychological mark amid a weaker US Dollar (USD). At the time of writing, XAU/USD is trading around $3,985, easing from an intraday high of $4,019 as bullish momentum stalls.

Gold's downside remains cushioned as the ongoing United States (US) government shutdown keeps markets on edge. The political deadlock is raising concerns over the potential economic fallout and weighing on the Greenback after a strong multi-day rally.

However, Bullion's upside appears limited in the near term as both macro and technical factors could cap further advances. Stronger-than-expected readings from the ADP Employment Change report and ISM Services Purchasing Managers Index (PMI) have reinforced expectations that the Federal Reserve (Fed) may hold off from cutting rates in December.

At the same time, improved market sentiment, reflected in firmer global equities after recent weakness, is discouraging investors from making large bets on Gold. That said, the broader outlook remains constructive amid persistent geopolitical and economic risks.

Market movers: US Dollar eases with focus on shutdown, tariffs and Fed commentary.

The US Dollar Index (DXY), which measures the Greenback's value against a basket of six major currencies, is trading around 99.91, retreating after briefly climbing to a five-month high of 100.36 on Wednesday.

Fed Chicago President Austan Goolsbee told CNBC on Thursday that "most labor market indicators show stability," with only "mild cooling" and "a little downside risk." He said he "may be reluctant to continue the rate-cutting cycle," though noted the settling point for rates will be "a fair bit below" current levels.

The US government shutdown has become the longest in history, surpassing the previous record of 35 days. On Wednesday, US President Donald Trump urged Republicans to do whatever it takes to reopen the government, including considering the abolition of the Senate filibuster.

The US Supreme Court heard arguments on Wednesday over the legality of President Trump's use of tariffs under the International Emergency Economic Powers Act (IEEPA). The hearing drew intense scrutiny as several justices, including members of the conservative bloc, questioned whether the 1977 law grants the president authority to impose broad trade measures without congressional approval.

The World Gold Council's (WGC) US Gold Demand Trends Q3 2025 report, published on November 5, showed that US gold demand surged 58% YoY to 186 tonnes, driven by record inflows into gold-backed ETFs. US-listed funds added 137 tonnes in Q3, accounting for 62% of global inflows. Trading volumes on COMEX and US ETFs also jumped to a record $208 billion per day in October as Gold notched multiple new highs.

Separately, the WGC's Central Bank Gold Statistics report, released on November 4, revealed that central banks recorded net purchases of 39 tonnes in September, marking the strongest monthly total of the year. Brazil led the buying with 15 tonnes, followed by Kazakhstan and Guatemala, lifting year-to-date net buying to 200 tonnes.

Source: fxstreet