Gold (XAU/USD) advanced above the key $4,000 level on Thursday as the US Dollar retreated from five-month highs. The yellow metal trades near $4,016, extending its recovery for the second consecutive session amid mild safe-haven demand fueled by the ongoing US government shutdown.

The prolonged political deadlock in Washington is weighing on the Greenback and boosting Gold’s appeal. However, gains remain capped as stronger US economic data — including upbeat ADP employment and ISM services figures — have tempered expectations for a Fed rate cut in December.

Meanwhile, risk sentiment has improved across global equities, limiting safe-haven inflows. Yet, persistent geopolitical and fiscal concerns continue to provide underlying support for Gold.

Technically, XAU/USD faces stiff resistance between $4,020 and $4,050. A clear break above this zone could open the door to $4,100. On the downside, support lies near $3,985, with the broader bias staying positive as long as prices hold above $3,900.