What will happen to gold prices after Trump signs the temporary funding bill?

Spot gold prices consolidated mainly during Thursday's Asian session, currently oscillating around $4,195/oz. The recent sharp surge certainly surprised many, but more importantly—can this rally continue?

**Policy positive news drives gold prices through key levels**

On Wednesday evening, U.S. President Trump signed the temporary funding bill, ending the longest government shutdown in U.S. history. The federal government will receive continued funding until January 30, 2026, restoring normal operations across departments. As soon as this news broke, spot gold prices surged by $68.49 on Wednesday, a 1.66% increase, briefly hitting the critical level of $4,200/oz.

What does the end of the shutdown mean? Economic data resumes release. The return of official statistics helps support the Federal Reserve's December rate cut decision. According to CME tools, the market prices in a 63% probability of a 25 bps rate cut in December. In a low-interest-rate environment, non-yielding assets like gold tend to perform more prominently.

**Technical signals indicating a bullish trend**

From the 4-hour chart, the technical pattern of gold looks promising. The 20-period simple moving average (SMA) has successfully crossed above the 100-period and 200-period SMAs, with prices staying above all three moving averages. This indicates a short-term bullish dominance. Notably, the 100-period SMA has gradually flattened from a downtrend, while the 200-period SMA remains upward sloping, making this setup very friendly for bulls.

Momentum indicators have returned above the 100 line and are trending higher, while the Relative Strength Index (RSI) is around 72, showing slight cooling but still indicating bullishness. This suggests upward pressure on gold prices remains.

**Key support levels and downside risks**

If gold prices pull back, the 200-period SMA (around $4,042.81/oz) and the 100-period SMA (around $4,035.33/oz) will serve as important support zones. As long as prices stay above these levels, the bullish trend could continue.

Conversely, if prices break below the $4,042–$4,035 range, the upward potential will be significantly pressured. The daily chart also confirms this logic— the 20-day moving average remains above the 100-day and 200-day SMAs, with longer-term SMAs still rising. Overall, the risk points to further upside, but technical indicators show momentum is gradually waning.

**Market expectations vs. actual economic data**

Tudor, the chief commodity strategist at Deutsche Securities, believes that the reopening of the U.S. government is just the beginning. When economic data resumes, the market is likely to see signs of economic weakness in the U.S. If such data confirms a slowdown, it will undoubtedly further support gold prices.

In simple terms, Trump signing the bill to end the shutdown is just a catalyst. The real driver for continued gold price gains depends on upcoming economic data and the Fed's stance. In the short term, gold remains around $4,195, with technicals still favoring bulls, but RSI approaching overbought levels signals potential risks.