by GoldFxPro / October 5 , 2025
Gold prices hover near record highs around $3,890 as U.S. fiscal uncertainty and Fed rate cut hopes boost demand.
The yellow metal heads for its seventh straight weekly gain amid strong safe-haven sentiment.
Gold Price Near Record Highs
After a brief dip earlier in the week, gold rebounded sharply, regaining ground near its all-time high of $3,896–$3,897.
U.S. gold futures also settled above $3,900, signaling that bullish momentum remains intact.
The metal’s recovery came amid losses in the greenback and mixed movements in U.S. Treasury yields. Despite overbought technical conditions, buyers continue to dominate the market, keeping gold within striking distance of the psychological $4,000 mark.
Technical Overview: Key Levels in Focus
| Type | Zone | Significance |
|---|---|---|
| Immediate Resistance | $3,890 – $3,900 | Major barrier; breakout could trigger fresh all-time highs |
| Next Resistance | $3,969 – $4,000 | Long-term Fibonacci projection & channel resistance |
| Support 1 | $3,820 – $3,819 | Intraday swing low / first line of defense |
| Support 2 | $3,800 | Psychological and structural support |
| Support 3 | $3,758 – $3,735 | Potential downside targets if correction deepens |
Technical indicators remain firmly bullish, though the daily RSI signals overbought conditions. Analysts caution that a break below $3,800 could lead to a deeper correction toward $3,735–$3,700, while sustained trading above $3,890 may open the door to $4,000 and beyond.
Fundamental Drivers: Fed Policy, U.S. Shutdown, and Global Risk
1. U.S. Government Shutdown Impact:
The ongoing partial U.S. government shutdown continues to disrupt key economic releases such as the Non-Farm Payrolls (NFP) report.
This lack of data visibility increases market uncertainty and supports gold’s appeal as a safe-haven asset.
2. Rate Cut Expectations Strengthen:
Traders are now pricing in a 97% chance of a 25-basis-point Fed rate cut in October and an 85% chance of another in December, according to CME FedWatch.
Lower real interest rates historically support gold, as they reduce the opportunity cost of holding non-yielding assets.
3. Geopolitical and Risk Factors:
Renewed geopolitical tensions, including military support developments in Ukraine, continue to drive safe-haven flows.
Meanwhile, a cautious risk-on sentiment in global equities has yet to meaningfully dent gold’s upward trajectory.
UBS Analysts
UBS analysts share a similar outlook, forecasting gold at $4,200 per ounce in the coming months as declining real interest rates and a weaker U.S. dollar fuel long-term demand.
Short-Term Forecast: Bulls in Control, But Watch for Pullbacks
Gold is expected to remain range-bound between $3,820 and $3,900 in the near term, with occasional tests of higher resistance.
Momentum remains bullish, but overbought signals suggest a potential pause or brief correction before the next leg higher.
A clear breakout above $3,900 could accelerate gains toward $3,950–$4,000, while dips toward $3,820–$3,800 may attract fresh buying interest.
As the Federal Reserve turns dovish and the U.S. shutdown persists, gold’s fundamental backdrop remains supportive.
Unless there’s a sharp rebound in the U.S. dollar or a surprise Fed pivot, the path of least resistance for XAU/USD remains upward.
Next Key Levels:
- Bullish Target: $3,969 → $4,000
- Bearish Risk Zone: Below $3,800 → $3,735
Gold’s relentless climb highlights the market’s unease with fiscal and geopolitical risks.
While the metal may consolidate below $3,900 in the short term, long-term momentum favors buyers.
For traders, buying on dips remains the preferred strategy as gold eyes the $4,000 milestone in the coming weeks.
Disclaimer:
This article is for informational purposes only and should not be considered financial or investment advice.
Readers are advised to conduct their own research before making any trading or investment decisions.
FAQs
Gold Weekly Forecast: Resistance at $3,890, Bulls Eye $4,000
1. Why is gold trading near record highs in October 2025?
Gold prices are hovering near record highs due to a combination of U.S. government shutdown concerns, expectations of Federal Reserve rate cuts, and strong safe-haven demand amid global uncertainty.
What is the current resistance level for gold (XAU/USD)?
The immediate resistance level for gold is around $3,890–$3,900, while the next key resistance lies between $3,969 and $4,000, which could trigger fresh all-time highs if broken.
Could gold prices correct from current levels?
Yes, while momentum remains bullish, the daily RSI indicates overbought conditions. A drop below $3,800 may trigger a correction toward $3,735–$3,700 before buyers re-enter the market.
How does the U.S. government shutdown affect gold prices?
The ongoing U.S. government shutdown delays key economic data releases, increasing market uncertainty and pushing investors toward gold as a safe-haven asset.
What impact do Fed rate cut expectations have on gold?
Expectations of rate cuts lower real interest rates, reducing the opportunity cost of holding gold and supporting its upward momentum. Markets currently see a 97% chance of a rate cut in October.
Is gold likely to hit $4,000 soon?
If gold sustains momentum above $3,890–$3,900, a breakout toward $4,000 is possible in the coming weeks, supported by a weaker U.S. dollar and dovish Federal Reserve outlook.
