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Wu noted that in recent days gold prices have followed a classic “rally-and-pullback” pattern, saying, “Both bulls and bears have been active in the markets,” and continued:

“On the one hand, rising uncertainty over the U.S. economic outlook and doubts about the Fed’s independence have supported safe-haven demand; on the other hand, the reopening of the government, some profit-taking by the bulls, and falling expectations of policy easing as hawkish signals from Fed officials continue have all limited the upside momentum.”

Pointing out that markets will be focused on U.S. nonfarm payrolls data for September on Friday, Wu warned: “The data may be somewhat delayed due to the government shutdown, but it can still serve as an important catalyst for short-term volatility.”

From a technical perspective, Wu highlighted that after last week’s sharp rally, gold is searching for direction amid a sudden pullback, and added:

“At the beginning of last week, the price held above $4,000 and broke through the $4,100 and $4,200 levels, reaching an intraday high of $4,245,” he said. “However, on Thursday market sentiment shifted abruptly, gold fell back below $4,100 and ended the week at $4,085.”

Wu said that last week’s high of $4,245 will be an important resistance level for gold on its way to a new all-time high, and went on:

“Notably, gold’s correlation with the U.S. dollar, Treasury yields and equities is currently low, which means prices are being driven largely by flows rather than traditional macro factors – and that is increasing volatility. Recent fundamental developments are worth watching, as they may determine the future direction of prices.”

He said he expects gold to trade in the $4,000–$4,250 range in the short term: “The market will focus on delayed data releases that could influence rate-cut expectations,” Wu noted, adding:

“Market expectations are for new jobs to rise from 22,000 to 50,000, with unemployment holding steady at 4.3%. If the data show that the labor market remains resilient, it could put slight pressure on gold. For the December 10 FOMC meeting, the November nonfarm payrolls report, due on December 5, will be even more important.”

Emphasizing that the release of the Federal Open Market Committee (FOMC) minutes on Wednesday will also be significant, Wu said: “If the minutes show that most officials remain concerned about inflation and are opposed to easing, gold could face headwinds; if concerns about economic slowdown are emphasized, it could provide limited support.”

On Monday afternoon gold traded in a relatively narrow $50 range, and spot gold ended the day down 0.54% at $4,063.73 per ounce.