Gold prices have been swinging around $4,100 without a clear trend. This instability comes as Federal Reserve officials show little willingness to cut interest rates, which has shifted traders’ expectations. As a result, demand for the US Dollar has risen, affecting gold prices. Though the lengthy US government shutdown raises worries about economic growth, traders are waiting for the FOMC Minutes and the US Nonfarm Payrolls report for more insights.

Traders Are Cautious

Traders are exercising caution as Federal Reserve members lean against reducing interest rates. The chances of a rate cut in December have fallen below 50%, which has had a negative impact on gold. The upcoming Nonfarm Payrolls report is expected to show some weakness due to the government shutdown, influencing the Fed’s policy decisions and gold prices. Gold has remained stable below the 20-period SMA on the 4-hour chart, but traders should remain wary as there is no strong upward trend. A drop below the 200-period SMA could send prices further down towards the key $4,000 level, possibly hitting $3,931 and $3,886. The Nonfarm Payrolls report from the US Bureau of Labor Statistics measures job growth outside of agriculture. This report is critical as it impacts the US Dollar and is closely monitored by traders for its effects on currency policy. The next report is due on November 20, 2025, and it is expected to show an addition of 50,000 jobs. Gold remains stuck below $4,100 as we deal with opposing challenges from a cautious Federal Reserve and a potentially struggling economy. Fed officials are hesitant to cut rates, boosting the US Dollar and limiting gold’s price potential. At the same time, the recent 40-day government shutdown—the longest in US history—raises serious economic concerns.

Market Awaits Key Reports

The market is essentially on standby ahead of Wednesday’s FOMC minutes and Thursday’s delayed Nonfarm Payrolls report. The consensus for job growth is only 50,000, a drastic drop from the 180,000 monthly average seen earlier this year before the shutdown. This data will drive the market’s next move and clarify whether the Fed will need to ease up on policy. Given the uncertainty, options trading could be a great way to take advantage of the expected volatility from this week’s reports. A long straddle or strangle on gold futures may yield profits from significant price shifts in either direction following the jobs report. This strategy allows traders to prepare for a breakout without committing to whether the news will be positive or negative. If the jobs figure comes in much lower than the 50,000 estimate, it would confirm fears about the economy and likely lead traders to anticipate a Fed rate cut. In this case, we would consider buying call options or establishing long positions, aiming for a breakout above the $4,145 resistance level. A weak jobs report would probably weaken the dollar, making gold more attractive to investors. On the other hand, if the jobs report surprises on the upside, it would give the Fed more reason to keep its strict policies in place and could cause gold prices to drop. This would be a good moment to buy put options, as a stronger dollar may push gold down to test the significant $4,000 support level. We witnessed a surprisingly strong jobs report after the 2019 shutdown, so we need to be ready for this possibility. Create your live VT Markets account and start trading now.

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