Several members of the FOMC expressed a lack of confidence in lowering borrowing costs, and traders reduced their expectations for another Fed rate hike. This, in turn, helped the U.S. dollar gain some positive momentum at the start of the new week, becoming a key factor weighing on non-interest-bearing gold. However, concerns over weakening economic momentum due to the longest government shutdown in U.S. history kept alive the possibility of further monetary easing by the Fed, which may limit the dollar's gains. Additionally, as market risk appetite eases, this could provide some support for the safe-haven asset gold and help limit further downside. Traders may avoid taking new directional bets for now and instead wait for the release of the FOMC meeting minutes on Wednesday. Moreover, the October nonfarm payrolls data, due on Thursday, will also influence the dollar's movement and, by extension, commodity prices. 

Personnel changes within the Federal Reserve, along with remarks from officials, heightened concerns about the independence of monetary policy. Former White House economic adviser Kevin Hassett expressed willingness to take over as Fed Chair and advocated for significant rate cuts, while dovish-leaning Atlanta Fed President Raphael Bostic unexpectedly announced his resignation in February next year. These events sparked speculation that future leadership changes might lean more dovish. Nevertheless, several current Fed officials maintained a hawkish tone during the week, emphasizing that the pause in rate cuts was not due to insufficient data but rather caution over the persistence of inflation. These statements dampen market expectations for a December rate cut from 66% to 43%. The tightening of rate path expectations further diminished the appeal of non-yielding assets, such as gold. At the same time, risk assets such as U.S. stocks, Treasuries, and cryptocurrencies also came under pressure, leading to synchronized cross-market sell-offs that intensified downward pressure on gold prices. 

Based on the weekly chart, the Bollinger Bands are expanding upward. Last week's long upper shadow pattern signaled that a potential trend reversal could occur at any time. In addition, the MACD is about to form a death cross. If confirmed, prices are likely to adjust toward the EMA 12 level, around $3,930. The RSI stands at 69, indicating strong bullish sentiment; however, as prices are gradually declining, a correction is likely to emerge at any time. Regarding the daily chart, the MACD's bullish momentum is gradually weakening, yet prices have failed to make new highs — a sign of a potential bearish divergence. This increases the likelihood of continued short-term declines. Key support levels are the Bollinger Lower Band and the EMA 50, at 3,936, respectively. The RSI is at 52, placing the price in a neutral zone, although price highs continue to trend downward. It is recommended to sell at highs.

Trading direction: Sell

Entry price: 4070

Target price: 3600

Stop loss: 4390

Support: 3900/3800/3600

Resistance: 4380/4500/5000