Gold extended rebound in Asian trading on Monday, briefly crossing the $4,050 psychological mark to touch a ten-day high. The yellow metal’s momentum comes as traders await clarity on the resolution of the record US government shutdown, which has heightened concerns over the broader US economy.

While gold consolidates its recent gains, risk sentiment has seen a mild improvement amid optimism about the US government reopening and China’s move to temporarily suspend its export ban on certain dual-use materials, including gallium, germanium, and antimony.

However, investors remain cautious as the amended US spending package still requires approval from the House of Representatives before reaching President Donald Trump for signing — a process that could take several days. This uncertainty, coupled with persistent economic worries stemming from the prolonged shutdown, continues to lend support to gold as a traditional safe-haven asset.

A weakened US dollar and worries over a protracted US government shutdown continue to bolster the precious metal, increasing demand for safe-haven assets. Indeed, according to the Congressional Budget Office, which is impartial, the government shutdown could reduce GDP by 1 – 2% in the fourth quarter.

As U.S. data revealed a spike in October layoffs, traders also boosted their bets on a December rate decrease, they are now putting in a 67% possibility. The government and retail sectors experienced employment losses in October, and enterprises’ use of artificial intelligence and cost-cutting measures resulted in a spike in announced layoffs. According to private data released on Thursday, cost-cutting and the deployment of AI were the main causes of the US economy’s October job loss of 153,000, the most in 22 years.