Gold price (XAU/USD) trades positively around $4,050 in the Asian market on Monday. A weak US labour market, indicated by private jobs data, has led to expectations of US rate cuts, supporting Gold prices.
US Challenger job data revealed over 150,000 job cuts in October, the largest reduction in over two decades. This spurred speculation on rate cuts, affecting the US Dollar and boosting Gold prices. The likelihood of a December rate cut is now seen at nearly 66%.
US Consumer Sentiment
US Consumer Sentiment fell to a low not seen since June 2022. The Consumer Sentiment Index dropped to 50.3 in November, missing the expected 53.2 mark. Meanwhile, signs pointing to an end of the US government shutdown could impact Gold, a safe-haven asset.
Gold, valued for its non-yielding nature, often rises with lower interest rates. Central banks have added substantial Gold to their reserves, with emerging economies like China and India leading. Gold’s inverse relationship with the US Dollar and Treasuries, alongside geopolitical and economic factors, influences its volatility.
A weak Dollar typically bolsters Gold prices. As Gold is priced in dollars, it serves as a hedge against both inflation and depreciating currencies.
We’re seeing gold prices hold strong around $4,050, largely because of expectations for a Federal Reserve rate cut in December. The recent Challenger report, showing the largest October job cuts in over two decades, is fueling these bets. This makes lower interest rates seem much more likely, which is good for gold.
Watching US Government Shutdown
The weak consumer sentiment numbers from the University of Michigan, dropping to a low not seen since mid-2022, add to our view of a slowing economy. This aligns with the trend of slowing job growth we’ve seen through most of 2025, where Non-Farm Payrolls have averaged just 95,000 per month, a sharp drop from the 200,000+ averages we saw in 2023 and 2024. For traders, this reinforces the case for buying call options to bet on further price increases.
We must also watch for signs that the US government shutdown is ending, as a resolution could briefly strengthen the dollar and weaken gold’s safe-haven appeal. A deal in Washington might cause a short-term dip in the precious metal’s price. To manage this risk, we could consider buying some out-of-the-money put options as a hedge against our bullish positions.
Beyond short-term US data, we should not ignore the steady demand from central banks, which has continued since the record-breaking purchases we saw back in 2022. World Gold Council data through the third quarter of 2025 shows that central banks, particularly in Asia, remain net buyers, absorbing over 800 tonnes so far this year. This consistent buying provides confidence for holding long positions and makes strategies like selling puts more appealing.
Ultimately, most of our trading decisions will depend on the US Dollar’s direction, as gold is priced in it. With a near 66% chance of a December rate cut priced in, the path of least resistance for the dollar appears to be downward. We can express this view through derivative strategies like bull call spreads, which would profit from a rising gold price while capping our risk.
