Gold prices broke out of their recent range on Monday, reclaiming the $4,000 mark amid a softer dollar and improving market sentiment. Spot gold traded at $4,078 per ounce by 10:45 GMT.
Optimism returned to trading floors after the US Senate approved a funding deal late Sunday, clearing the way for federal agencies to reopen following a month-long shutdown. The compromise, backed by a minority of Democrats, followed a tense weekend of negotiations in Washington.
The Senate’s approval lifted market mood, even as traders continued to weigh expectations for Federal Reserve action. Weak private-sector job readings last week, including Challenger layoffs showing the worst October performance in about 20 years, have kept bets for a December 25-basis-point rate cut alive. CME FedWatch data indicated traders are pricing in a 61.9% chance of a cut.
The end of the shutdown is expected to restore the flow of US economic data, adding clarity for markets and supporting defensive assets such as gold.
With the dollar slightly weaker and the Fed seen as likely to ease policy again, bullion regained ground, offsetting the recent losses that had kept it below $4,000.