Gold retakes $4,000 amid reviving safe-haven demand; upside potential seems limited

• Gold reverses a modest Asian session slide as Trump’s remarks revive safe-haven demand.
• The Fed’s hawkish stance continues to underpin the USD and might cap the precious metal.
• Traders now look to the US ISM Manufacturing PMI and Fed speak for a short-term impetus.

Gold (XAU/USD) attracts some dip-buyers following an Asian session slide to the $3,963-3,962 region on Monday and climbs back above the $4,000 psychological mark in the last hour. Comments from US President Donald Trump suggested that his administration may restrict the flow of cutting-edge artificial intelligence (AI) hardware to its strategic rival, China. This turns out to be a key factor that provides a modest lift to the safe-haven precious metal. Apart from this, concerns about economic risks stemming from a prolonged US government shutdown further seem to underpin the commodity.

Meanwhile, the US Federal Reserve's (Fed) hawkish tilt assists the US Dollar (USD) to preserve last week's strong gains to its highest level since early August and caps the upside for the non-yielding Gold. This, along with the bullish tone around the equity markets, makes it prudent to wait for strong follow-through buying before positioning for an extension of the recent bounce from sub-$3,900 levels, or an over three-week low, touched last Tuesday. Traders now look to the release of the US ISM Manufacturing PMI and speeches from influential FOMC members for short-term opportunities.

Daily Digest Market Movers: Gold attracts some safe-haven flows; Fed’s hawkish tilt warrants caution for bulls

• US President Donald Trump told reporters aboard Air Force One on Sunday that Nvidia's advanced Blackwell chip for artificial intelligence would not be available to other people. This, to some extent, offsets the latest optimism fueled by the de-escalation of trade tensions between the US and China – the world's two largest economies – and provides a modest lift to the safe-haven Gold at the start of a new week.
• The US government shutdown enters Day 33 on Monday amid a deadlock in Congress on the Republican-backed funding bill. Trump again urged Republican senators to end the shutdown by abolishing the filibuster rule, an unprecedented move that GOP leaders have, so far, resisted. Nevertheless, concerns that a prolonged government closure could cause economic damage further underpin the precious metal.
• The US Federal Reserve lowered borrowing costs by 25 basis points for the second time this year last Wednesday and also said it would stop reducing the size of its balance sheet as soon as December, marking the end of its quantitative tightening. That said, Fed Chair Jerome Powell cautioned that another similarly-sized interest rate cut is far from a foregone conclusion at the next monetary policy meeting in December.
• Furthermore, a slew of influential FOMC members further pushed back against expectations for more policy easing by the end of this year. This, in turn, assists the US Dollar to preserve last week's strong gains and stand firm near its highest level since early August. Apart from this, the upbeat market mood could keep a lid on further appreciation for the non-yielding yellow metal and warrants caution for bullish traders.
• Traders now look forward to Monday's US economic docket, featuring the release of the ISM Manufacturing PMI later during the North American session. Apart from this, speeches from influential FOMC members will play a key role in driving the USD demand and providing a fresh impetus to the commodity.

Gold needs to surpass the $4,045-4,050 barrier to back the case for any further appreciation

The XAU/USD pair showed some resilience below the 100-hour Simple Moving Average (SMA) during the Asian session. Moreover, oscillators on hourly/daily charts have again started gaining positive traction and back the case for additional gains. However, it will be prudent to wait for a sustained move beyond the $4,045-4,050 hurdle, above which the Gold price could climb to the $4,075 intermediate hurdle before aiming to reclaim the $4,100 mark.

On the flip side, the Asian session low, around the $3,963-3,962 region, now seems to protect the immediate downside ahead of the $3,917-3,916 region and the $3,900 round figure. Some follow-through selling below the $3,886 zone, or an over three-week low touched last Tuesday, could make the Gold price vulnerable to accelerate the fall towards the $3,850-3,845 zone en route to the $3,800 mark and the next relevant supports near the $3,765-3,760 zone.