Gold price (XAU/USD) extended its decline below the $4,100 mark during Thursday’s Asian session as easing tensions between the United States and China encouraged traders to book profits after a strong rally earlier this year. Optimism surrounding renewed trade talks, coupled with the end of the Diwali festival in India—the world’s second-largest gold consumer—has also contributed to a short-term slowdown in physical demand.

Despite the recent pullback, market analysts believe the downside remains limited. Persistent geopolitical uncertainties, the ongoing US government shutdown entering its fourth week, and speculation over potential Federal Reserve rate cuts continue to support demand for the safe-haven metal. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, reinforcing its longer-term bullish bias.

Traders are now closely watching the upcoming US September CPI report, set for release on Friday, which could provide fresh cues for the Fed’s policy direction. A stronger-than-expected inflation reading might boost the US Dollar and weigh on gold in the short term, while a softer print could rekindle buying interest.

Technically, gold remains underpinned by its 100-day Exponential Moving Average (EMA), maintaining a constructive outlook even as it consolidates recent gains. The 14-day Relative Strength Index (RSI) sits comfortably above the midline near 57, suggesting that bullish momentum remains intact.

Immediate resistance is seen at $4,140, followed by $4,330 and $4,365. On the downside, key support lies near the psychological $4,000 level, with further weakness potentially exposing the October 10 low at $3,947 and then $3,838.

While short-term corrections may continue amid profit-taking and shifting sentiment, gold’s stellar performance this year—up more than 50% year-to-date—underscores its enduring appeal as a hedge against uncertainty and policy risk.