Gold Price Nears $3,830 as U.S. Shutdown Risks and Geopolitical Tensions Drive Safe-Haven Rush

Gold surged nearly 2% on Monday, climbing close to all-time highs as investors sought safety amid growing concerns over a potential U.S. government shutdown and rising geopolitical risks. At the time of writing, XAU/USD trades at $3,827, just shy of the session peak of $3,833.

Treasury Yields Slide, Boosting Gold

The precious metal pushed past its September 23 record of $3,791, fueled by a sharp drop in U.S. Treasury yields and renewed weakness in the U.S. Dollar.

Market participants worry that a federal funding lapse could trigger a shutdown, delaying critical economic releases such as the Nonfarm Payrolls (NFP) report from the Bureau of Labor Statistics. Reports indicate that the BLS would suspend data publication during a government closure, adding further uncertainty.

Fed Officials Remain Hawkish Amid Mixed Signals

Comments from Federal Reserve policymakers added to the market noise.

• St. Louis Fed’s Alberto Musalem maintained a hawkish tone, stressing that inflation expectations remain “somewhat high,” while warning of softening in the labor market.

• New York Fed’s John Williams noted that monetary policy is restrictive enough to curb inflation, though the labor market is slowly cooling.

• Cleveland Fed’s Beth Hammack echoed concerns over persistent inflation, pointing to tariffs as a factor slowing the disinflation trend.

Geopolitical Tensions Add Momentum

Geopolitical risks also buoyed demand for safe-haven assets. Russia’s defense ministry announced that its forces seized control of Shandryholove, a village in Ukraine’s Donetsk region, intensifying global uncertainty.

Market Drivers: Weak Dollar, Falling Yields

The U.S. Dollar Index (DXY) fell 0.27% to 97.91, while 10-year Treasury yields slipped three basis points to 4.141%. Real yields—closely tied to gold’s performance—also retreated, reinforcing bullion’s bullish momentum.

Meanwhile, U.S. data showed Pending Home Sales jumped 4% in August, surprising markets after July’s contraction.

In another development, Switzerland reportedly offered to invest in the U.S. gold-refining sector in hopes of easing the recently imposed 39% import tariff.

Rate Cut Expectations Rise

Following last week’s core PCE inflation report, traders increased bets on monetary easing. Markets now price in an 89% chance of a 25-basis-point cut in October, with only an 11% probability of a deeper 50-point reduction, according to Prime Market Terminal data.

Technical Outlook: $3,800 Key Level

Gold bulls remain in control, with the Relative Strength Index (RSI) holding in overbought territory between 70–80.

• Immediate support is seen at $3,800. A break below could expose $3,750, followed by $3,700 and the 20-day SMA at $3,666.

• On the upside, resistance lies near $3,850, with momentum suggesting that fresh record highs remain within reach.