Gold Rally Stumbles As Fed Jitters Test The “Safe-Haven” Trade

Gold opened Monday around 4,050–4,080 dollars an ounce, bruised but still elevated after a wild week that showed how political and monetary uncertainty continue to drive the market.

Prices had punched above 4,200 dollars earlier in the week, helped by softer US data, a weaker dollar and worries over a prolonged US government shutdown, before a late sell-off erased much of the gain.

The turning point came on Friday, when hawkish remarks from Federal Reserve officials cut the odds of a December rate cut and reminded investors that cheap money is not guaranteed.

Leveraged funds rushed to unwind positions, hitting gold and silver together with equities. Even so, front-month futures still finished the week about 2 percent higher, underlining how deeply the metal is embedded in global portfolios after years of inflation and debt-fuelled politics.

Beneath the noise, physical and investment demand remain strong. Global gold demand in the third quarter hit a record, driven by investment flows and central-bank buying rather than jewellery.

Exchange-traded funds added millions of ounces this year, and total holdings sit at all-time highs. Central banks, wary of fiscal experiments and ballooning deficits in the major economies, bought roughly 220 tonnes in the quarter and could end the year with up to 900 tonnes of net purchases.

Gold churns in heavy trade but uptrend stays intact

Trading venues from London to New York and Shanghai show the same pattern: huge volumes and quick reversals.

COMEX open interest recently touched its highest level in more than a decade before easing, while Chinese and broader Asian ETF inflows and futures activity have surged.

In India, MCX futures echoed the global move, rising earlier in the week before a sharp 2.5 percent drop on Friday. Technically, gold is in a classic correction within a larger uptrend.

On the daily chart, prices remain well above long-term support, with the RSI back in neutral territory and the MACD losing downside momentum.

Four-hour charts look more bruised, with negative momentum and an RSI in the low 40s, but repeated defenses of the 4,000–4,050 zone suggest a shake-out rather than a full trend reversal.

For investors, the message is straightforward: as long as central banks and wary savers keep hedging against debt, inflation and political overreach, every hawkish shock may hurt gold in the short run but is unlikely to kill the broader bull story.

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