Gold price (XAU/USD) rallies above $3,800, eyeing its best monthly gain in 14 years. Explore technical levels, Fed rate cut bets, and trading strategies.
Key Points
- Gold breaks above $3,800/oz, setting fresh all-time highs.
- US government shutdown fears and 90% Fed cut odds for October fuel safe-haven demand.
- Traders eye resistance at $3,860 and psychological barrier at $4,000.
- Support zones seen at $3,780, $3,720, and $3,640.
- ETF inflows and central bank buying continue to support bullish momentum.
Market Overview
Gold prices have surged to record highs, climbing above $3,800 for the first time as the looming US government shutdown intensifies investor demand for safe-haven assets. The yellow metal is now on track for its best monthly performance in 14 years, supported by a weaker dollar, rising recession concerns, and increased expectations of Federal Reserve rate cuts.
At the same time, geopolitical tensions and strong central bank demand have added further bullish pressure, making gold one of the most sought-after assets in 2025.
Fundamental Drivers
1. US Government Shutdown Risks
With Washington gridlocked over budget approval, fears of a federal shutdown are pushing investors toward gold. Historically, shutdowns weigh heavily on risk sentiment, which strengthens safe-haven flows into bullion.
2. Federal Reserve Policy
Markets now price in a 90% chance of a rate cut in October and a 65% chance in December, according to FedWatch data. Lower interest rates reduce the opportunity cost of holding non-yielding gold, driving demand higher.
3. Central Bank & ETF Demand
Global central banks have been consistently adding to their reserves, while ETF inflows remain positive. This structural support provides a strong base for gold’s long-term uptrend.
4. Global Market Sentiment
Weak equity performance, falling crude oil prices, and Asian market volatility have further boosted gold’s role as a safe-haven.
Technical Analysis – XAU/USD (1H Chart)
Looking at the hourly chart, gold remains within a strong ascending channel, despite short-term pullbacks. Price recently tested $3,860 before correcting lower.
- Resistance Levels:
- $3,860 (recent high)
- $3,900 (next breakout target)
- $4,000 (psychological round number)
- Support Levels:
- $3,780 (immediate support)
- $3,720 (volume cluster/demand zone)
- $3,640 (swing low & major support)
- Trend: Still bullish within an upward channel. Pullbacks are being absorbed by demand zones.
- Momentum: Price looks slightly overheated in the short term, suggesting potential consolidation before another push higher.
Trading Setups
Buy Setup
- Entry: Above $3,820 (confirmation of demand)
- Target: $3,860 → $3,900 → $4,000
- Stop Loss: Below $3,780
Sell Setup
- Entry: Below $3,780
- Target: $3,720 → $3,640
- Stop Loss: Above $3,820
Gold’s record-breaking rally shows no signs of stopping, with structural (central bank buying) and cyclical (Fed cuts, shutdown fears) drivers both pushing the metal higher. As long as gold holds above $3,720, the bias remains bullish. A clean breakout above $3,860 could open doors for a historic run toward $4,000/oz.
FAQs
Q1: Why is gold rising now?
Gold is surging due to safe-haven demand from the US shutdown crisis, Fed rate cut expectations, and strong central bank purchases.
Q2: What is the next target for gold?
Key resistance sits at $3,860, with $3,900 and $4,000 as the next upside targets.
Q3: Is it safe to buy gold at $3,800?
Yes, but traders should manage risk. A pullback to $3,780–$3,720 may offer better entry levels.
Q4: Could gold fall despite bullish momentum?
Yes, if the US resolves its shutdown crisis quickly or if inflation data limits Fed cuts, gold could face short-term corrections.
Q5: What supports gold long-term?
Central bank accumulation, global economic uncertainty, and geopolitical tensions all support long-term gold strength.
Related Articles
Gold Rockets Past $3,800 as Rate Cuts & US Shutdown Fears Fuel Rally Gold Eyes $3,800 Breakout While XAU/USD Consolidates Near $3,740 Ahead of U.S. PCE Data Gold Still Has a Path Higher, But Weakening Jewelry Demand Could Slow Rally
