Gold (XAU/USD) held steady above the $4,200 level in early European trading on Monday, as traders balanced optimism over renewed US-China trade dialogue against ongoing geopolitical and economic uncertainties. The yellow metal continues to attract safe-haven flows amid the prolonged US government shutdown, global fiscal concerns, and persistent tensions in Eastern Europe, though easing trade-war fears have limited strong upside momentum.

Last Friday, US President Donald Trump said that imposing a full-scale tariff on China would be “unsustainable” and confirmed plans to meet his Chinese counterpart soon. His comments eased trade tensions and triggered some profit-taking in gold after the metal hit a record high near $4,380 late last week. Still, underlying demand for gold remains firm as investors remain cautious ahead of key US inflation data due Friday and the upcoming Federal Reserve policy meeting at the end of October.

Markets have fully priced in a 25-basis-point rate cut at both the October and December Fed meetings, according to the CME FedWatch Tool. Expectations of lower interest rates, coupled with a weaker US Dollar and strong ETF inflows, continue to underpin the non-yielding metal. Meanwhile, the ongoing US government shutdown — now in its 20th day — and rising government debt concerns are adding to gold’s appeal as a safe store of value.

From a technical standpoint, the $4,200–$4,210 region remains a strong short-term support zone, coinciding with the 100-hour Simple Moving Average and the 38.2% Fibonacci retracement of the October 9–17 rally. A sustained break below this area could trigger a deeper pullback toward $4,160–$4,100. On the upside, initial resistance lies near $4,275, followed by $4,300 and the record highs around $4,380.

Overall, gold’s broader bias remains positive, but traders are likely to stay cautious ahead of key macro events, including US inflation data and updates on US-China trade talks, which could set the tone for the metal’s next major move.