Dollar and Gold Locked in Stalemate as Data Blackout Deepens U.S. Uncertainty

Key Takeaways:

*The ongoing U.S. government shutdown has halted key inflation reports, leaving the Fed and markets operating without clear economic signals.

*The same uncertainty underpinning the dollar’s hesitancy has lent mild support to gold as investors seek protection from fiscal and political instability.

Market Summary:

The U.S. dollar and gold are moving in opposite yet connected directions, both shaped by Washington’s prolonged government shutdown and the resulting economic data blackout. With key inflation reports like CPI and PPI delayed, the Fed and investors are navigating blind, heightening market volatility. The lack of data has forced policymakers into caution that Chicago Fed President Austan Goolsbee warned against “front-loading” rate cuts without clearer inflation trends, while Governor Lisa Hammack said it’s “not obvious” policy is restrictive enough, underscoring a central bank trapped between uncertainty and political noise.

This vacuum has clouded the dollar’s outlook. Missing data limits the greenback’s ability to benefit from the Fed’s hawkish tone, yet markets’ reluctance to price in deep rate cuts still lends support. Signs of labor weakness including the largest October job-cut tally since 2003 have sparked concern that policy may be tightening too far. As investors balance these signals, the Dollar Index (DXY) has traded sideways, supported by safe-haven demand but constrained by political dysfunction.

Gold has responded in mirror fashion. The data blackout and policy ambiguity have revived its appeal as a hedge against uncertainty, though high real yields keep gains limited. Prices have steadied near $3,950 per ounce as investors weigh political paralysis and fiscal risks against a “higher-for-longer” Fed stance and a resilient dollar. The balance reflects risk-hedging demand offset by tight financial conditions.

Geopolitics add to the tension. Former President Trump’s warning of possible Supreme Court challenges to his tariff authority has fueled trade-policy uncertainty. While a legal setback could undermine confidence, renewed tariff risks remain inflationary supporting both the dollar and gold through different channels. Meanwhile, widening deficits and political gridlock continue to erode long-term faith in U.S. fiscal discipline.

Ultimately, both assets are driven less by data and more by perception of policy credibility and stability. The dollar stays firm under cautious Fed guidance, while gold holds its ground as a hedge against the very risks sustaining the greenback. Until data resumes and policy clarity returns, both are likely to trade within overlapping ranges of uncertainty.

Technical Analysis 

Dollar Index, H4

The DXY 4-hour chart shows the index retreating from the 100.25 resistance level after a strong bullish run in late October. The price structure suggests a short-term correction within a broader uptrend, as the index pulls back toward dynamic support provided by the 50-period moving average near 99.50.

The upward momentum that carried DXY from below 97.50 has started to cool off, with consecutive bearish candles forming after the recent top. The index is now hovering around a key confluence zone between 99.50 and the 100-period moving average, which will determine whether buyers can defend the broader trend. 

Momentum indicators point to continued corrective pressure. The RSI has eased to around 45, signaling fading bullish strength but not yet oversold. Meanwhile, the MACD shows a bearish crossover with red histogram bars expanding, reinforcing the short-term downside bias.

Overall, the DXY remains in a pullback phase after an extended rally, with 99.50 acting as the immediate pivot zone. Sustained buying above this level could restore bullish momentum, whereas failure to hold it may shift focus toward a deeper correction.

Resistance Levels: 100.25, 101.30
Support Levels:  99.50, 98.80

Gold, H4

The XAU/USD chart shows a period of consolidation following a steep correction from the $4,365–$4,450 double-top region. After breaking below its ascending trendline, gold shifted into a sideways-to-lower structure, with price action now hovering around $4,000–$3,985, a key short-term support zone.

Recent candles reflect waning bullish momentum, as every attempt to climb above $4,035 has been met with renewed selling pressure. The market seems to be forming a range-bound pattern, with buyers defending the $3,920 floor, while sellers cap rallies near $4,035. A clear break from this consolidation zone will likely set the tone for the next directional move.

Momentum indicators show indecision. The RSI is fluctuating around the midline, reflecting a lack of conviction from both sides. Meanwhile, the MACD is hovering close to the zero line, with slightly converging signal lines, suggesting muted momentum after prior downside exhaustion.

Resistance Levels: 4035.00, 4135.00
Support Levels: 3920.00, 3840.00