According to Reuters, the U.S. Senate on Monday approved a compromise deal to bring an end to the longest government shutdown in the country’s history.
According to Reuters, the U.S. Senate on Monday approved a compromise deal to bring an end to the longest government shutdown in the country’s history.
During the shutdown:→ millions of Americans lost access to food assistance programmes;→ hundreds of thousands of federal employees went without pay;→ air travel was severely disrupted.
The uncertainty surrounding the potential continuation of the shutdown appears to have contributed to a breakout in the price of gold (as a traditional safe-haven asset) above its recent consolidation zone, marked by black lines on the chart.
However, further gains could be capped not only by fading risk aversion but also by a less obvious resistance level, which the XAU/USD rate has reached today.
Technical Analysis of the XAU/USD Chart
Using the key pivot points (highlighted in bold), we can trace a descending channel, with the gold price now testing its upper boundary, where resistance may emerge.
Another argument supporting this view is that the price currently sits around the 50% retracement level of the A→B downswing. This area may attract sellers seeking to defend the downward trajectory of gold.
Whether this resistance line holds — or the bulls attempt to reignite the autumn rally — will largely depend on the tone of upcoming economic releases (delayed by the shutdown) and their impact on market expectations for a possible Federal Reserve rate cut.
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Ava