By Joseph Dahrieh, Managing Principal at Tickmill

Gold edged lower on Tuesday as investors took profits following recent record highs, while signs that the US government shutdown could be resolved this week could add to the selling pressure. White House officials suggested negotiations were progressing, easing some investor anxiety and reducing demand for defensive positioning. Even so, bullion continues to trade near historic levels, supported by expectations of Federal Reserve rate cuts, with markets still pricing in a 25-basis-point move later this month and another in December.

The metal’s underlying resilience remains evident in investment flows. Gold-backed ETFs attracted 59 tonnes in the week ending 17 October, the strongest inflow since July 2020 at the height of the pandemic. North America accounted for the bulk of subscriptions, while Europe registered a small outflow of just 0.5 tonnes, underscoring a broadly constructive global trend.

Geopolitical risks continue to provide a floor for prices. In the Middle East, a fragile ceasefire could leave demand for gold intact. In Eastern Europe, ongoing assaults keep tensions elevated, reinforcing gold’s appeal.

Looking ahead, while short-term selling may persist, the macro backdrop of geopolitical instability and imminent Fed easing continues to support a bullish medium-term outlook for gold.