The rebound is continuing for gold with price up another 0.4% today to $4,214 currently. After a drop under $4,000 and a tug of war there since the end of October, dip buyers are certainly showing much conviction in pushing price back up above $4,200 currently. The question though, is there scope for further gains down the road?
As things stand, gold buyers have numerous reasons to stay bullish as they have for quite some time. And even with the end of the US shutdown, it doesn't mean the end of data uncertainty surrounding the US economy.
If the administration doesn't want the October numbers published, especially for jobs, it makes it difficult for markets to get a good read on the flow of things in the labour market. Even more so since October is supposedly a weak month as underscored by the Challenger layoffs here.
Adding to that, the inflation picture also remains tricky. And there might not be all too much clarity on that front before the next Fed meeting in December at least.
It also begs the question if we are going to see the September non-farm payrolls come out in the week ahead, as one might expect it to. And what about retail sales data? That's a major component for US GDP and it remains to be seen if there is data for September, let alone October.
If there are no updates on inflation and consumer spending, with there also being minimal updates on the labour market, how does that play into the Fed's hands before next month's FOMC meeting?
As a reminder, Fed chair Powell said this last month: "What do you do if you're driving in the fog? You slow down."
And that prolonged uncertainty could be another reason for gold to keep staying underpinned. That as markets need to sort out their feet in figuring out what the Fed might do next.
Amid a push above the 50.0 Fib retracement level of the swing lower since the end of last month as well as the $4,200 mark now, gold buyers are definitely looking poised to make a run for the October highs near $4,380.
