Today, Thursday, gold continues to consolidate, although it holds above the key level of $4000 thanks to mixed fundamental data. The agreement reached between Israel and Hamas on launching the first stage of a peace plan reduces geopolitical tensions and prompts investors to lock in profits on the safe-haven asset — the precious metal, which still appears overbought. At the same time, the U.S. dollar is strengthening its weekly gains, reaching new highs since early August, which further weakens the momentum of this precious metal.

Nevertheless, dovish expectations from the Federal Reserve still provide some support to vulnerable gold, helping to limit its decline. In addition, risks from a prolonged U.S. government shutdown, which could weigh on economic data, add some positive momentum for the safe-haven currency XAU/USD.

The minutes of the Fed's September meeting, published on Wednesday, revealed near-unanimous support among policymakers for rate cuts due to concerns about employment. However, opinions were divided on whether one or two rate cuts should be expected before year-end.

According to the CME FedWatch tool, the probability of a Fed rate cut by 25 basis points in October and December is estimated at 93% and 79%, respectively. Furthermore, the ongoing U.S. government shutdown — now in its ninth consecutive day — is restraining dollar growth and providing an additional boost for the commodity asset. On Wednesday, the Senate once again failed to pass budget bills to unlock funding — the sixth consecutive unsuccessful round. No visible progress in negotiations has been seen, with Democrats and Republicans continuing to blame each other for the deadlock. Moreover, staff cuts among government employees pose a threat to the U.S. labor market.

From a geopolitical standpoint: on Wednesday, a senior Russian politician stated that Moscow would intercept Tomahawk cruise missiles and strike their launch positions if Washington approved their delivery to Ukraine. This fuels geopolitical tensions and helps limit gold's correction.

Since there are no major economic releases due to the U.S. government shutdown, traders will focus on Jerome Powell's comments to understand the trajectory of rate cuts. This will have a decisive impact on the dollar's path and provide new momentum for XAU/USD dynamics.

From a technical perspective, gold is testing the psychological level of $4000, bouncing off it. Therefore, before planning a significant corrective decline, it is worth waiting for a sustained breakout and consolidation below this level.

On the other hand, momentum above $4035 could push the price higher than Wednesday's all-time high around $4059–4060. Subsequent buying above the round level of $4100 can be considered a new trigger for XAU/USD bulls.