Gold Wavers as Traders Assess Potential US Government Shutdown

Core Viewpoint - Gold prices have experienced fluctuations due to profit-taking and geopolitical tensions, with a significant increase of over 10% this month and approximately 45% year-to-date, indicating strong demand for gold as a safe haven asset [2][3]. Group 1: Market Trends - Gold dipped to about $3,800 an ounce after reaching a record high earlier in the month, reflecting a broader trend of declining prices in precious metals [1]. - The Bloomberg Dollar Spot Index also edged lower, indicating a potential correlation between gold prices and currency fluctuations [4]. Group 2: Influencing Factors - The deadlock in Washington regarding government funding has heightened fears of a shutdown, which could impact the release of key economic reports, further driving demand for gold [3]. - Central bank demand and a resumption of interest-rate cuts by the Federal Reserve have supported gold prices, with analysts from Goldman Sachs and Deutsche Bank suggesting that the rally may continue [3]. Group 3: Trader Behavior - Profit-taking at the end of the month is suspected, particularly involving Chinese traders reducing their positions ahead of the Golden Week [2].