2025-09-29T17:16:28Z

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Have you ever wondered what makes gold shine so brightly even in turbulent times? Well, hold onto your hats because gold has just surged past an incredible $3,800 an ounce, marking a stunning new record in the world of finance!

This dazzling rise isn't just a fluke; it’s fueled by a weaker US dollar, declining Treasury yields, and escalating geopolitical tensions, all of which are driving investors towards this traditional safe-haven asset. With fears of a potential US government shutdown lurking just around the corner, the demand for gold has intensified, pushing its price to unprecedented heights.

As we kick off the week, gold (XAU/USD) is not just glittering; it’s practically blazing, having reached an all-time high of around $3,833. As of now, it trades near $3,831, reflecting a 1.85% jump on the day and extending a remarkable streak of gains into its seventh consecutive week.

Last week was an interesting one for gold, as it lingered just below its previous peak of $3,791 before gaining momentum following the release of the US Personal Consumption Expenditures (PCE) inflation report. Although inflation rates came in as expected, they remain above the Federal Reserve’s (Fed) target of 2%, keeping all eyes on upcoming labor market data that could steer the Fed's monetary policy.

Speaking of the labor market, Friday's US Nonfarm Payrolls (NFP) report is pivotal, as it could provide insights into the economy's health and how the Fed might respond. The backdrop for gold’s ascent remains strong, supported by a softer USD and lower Treasury yields, alongside rising fears of a government shutdown and other geopolitical uncertainties.

Now, let’s talk about the looming government shutdown. Starting Wednesday, the US could face a halt in operations unless Congress can strike a deal on funding. Republicans have proposed a stopgap bill to keep funding through November 21, but Senate Democrats are holding out for certain concessions. With President Trump stepping in to negotiate with Congressional leaders, the stakes couldn’t be higher.

According to the BHH Marketview report, the threat of a government shutdown could make the Fed adopt a more dovish approach. A brief shutdown might not sway the Fed much, but a prolonged one could raise significant concerns about economic growth and lead to a more accommodating Fed stance.

Adding to the economic drama, President Trump recently announced plans for a 100% tariff on movies made outside the US, claiming our “movie-making business has been stolen.” This follows a slew of tariffs previously announced on various goods, raising eyebrows about the economic implications.

Cleveland Fed President Beth Hammack emphasized that the central bank needs to remain cautious, especially with inflationary pressures still lingering, particularly in the services sector. She warned that tariffs might not just be a one-off impact but could have longer-lasting effects.

Looking at the technical side of things, XAU/USD has decisively broken above the $3,800 resistance level after a period of sideways trading, which indicates renewed bullish momentum. Current support sits at the previous breakout zone at $3,800 and is backed by the 21 and 50-period Simple Moving Averages (SMAs) on the 4-hour chart.

Should gold maintain its position above $3,800, the door is wide open for further gains, potentially eyeing targets above $3,850. However, with the Relative Strength Index (RSI) nearing 73, there’s a chance we may witness a short-term pullback, especially if the price dips back below the significant $3,800 level.

This story was corrected on September 29 at 17:53 GMT to accurately refer to Fed's Hammack as “she” instead of “he.”