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.
