Gold prices signal recovery after deep decline

As of 8:30 a.m. on November 17 (Vietnam time), the world gold price increased slightly to 4,087.8 USD/ounce. Improved market sentiment after the US government's resumption has weakened demand for safe-haven assets such as gold.

The US government reopened after President Donald Trump signed the budget bill last week, concluding the country's longest-running 43-day closure in history. Federal employees have been asked to return to work starting Thursday.

However, investors still face uncertainty over the release of economic data delayed during the government's closure. Analysts said that when the data is updated again, the labor market will likely show signs of weakness and the economy may be slowing down.

This could put pressure on the US dollar and support gold prices - an asset priced in greenback. Gold, a non-yielding asset, often has positive developments during periods of economic uncertainty and a low interest rate environment.

However, gold's gains may be limited by the "hawlish" stance of US Federal Reserve (FED) officials, making expectations for a December rate cut less likely.

Kansas City Fed President Jeffery Schmid said last Friday that monetary policy should restrain demand growth, and said the current policy is at a slight tightening level, in line with his assessment.

The financial market currently rates a 54% chance that the Fed will cut the operating interest rate by 25 basis points at its December meeting, down from the 62.9% recorded earlier last week, according to CME's FedWatch tool.

Traders will be waiting for more signals from Fed officials' speeches on Monday, when John Williams, Philip Jefferson, Neel Kashkari and Christopher Waller will all speak up.

In addition, investors are also paying attention to a series of US economic data due for release this week, including Empire State manufacturing survey on Monday; FOMC meeting minutes on Wednesday; Philly FED manufacturing survey, weekly jobless claims and existing home sales on Thursday; along with S&P's preliminary PMI and the University of Michigan consumer confidence index on Friday.

These data are expected to provide a clearer picture of the health of the economy after the disruption caused by the US Government's closure, which could strongly affect the movements of the USD and gold prices in the short term.