gold has commenced the week on a bullish note, pushing toward historic highs amid heightened geopolitical and economic uncertainties. The precious metal has surpassed the $3,800 level for the first time, signaling robust buying interest despite extreme overbought technical conditions. This rally is driven by investor demand for safe-haven assets amid concerns over a potential U.S. government shutdown at the start of the fiscal year. Fears that disruptions could delay key economic data releases, including the upcoming employment report, have further bolstered gold ’s appeal.
The U.S. dollar has weakened broadly as market participants reassess the implications of a possible shutdown, resulting in diminished demand for the currency. In addition, trade and geopolitical tensions, including ongoing tensions in the Middle East, are contributing to financial market volatility. Despite these developments, recent economic data from the United States has painted a resilient picture of the economy, countering expectations of significant Federal Reserve rate cuts this year. Currently, markets are pricing in roughly 40 basis points of easing by December, influenced by ongoing labor market strength and manufacturing activity.
Investors are now focusing on upcoming U.S. economic indicators, such as job openings, private payroll data, and manufacturing and services sector purchasing managers’ indices. These figures are expected to provide further insight into economic momentum and may influence future Federal Reserve policy decisions, which in turn affect gold and the dollar. Meanwhile, speeches from Fed officials and geopolitical headlines are likely to impact gold prices in the near term.
From a technical perspective, gold remains in an overbought regime, with the Relative Strength Index (RSI) remaining elevated at around 77. Buyers need a daily close above the $3,800 level to reinforce the bullish trend, with key resistance levels seen at $3,850 and potentially $3,880. On the downside, support is established at an intraday low of approximately $3,756, with further support levels around $3,718 and the psychological $3,650 level. The gold market continues to react to macroeconomic developments, with technical signals suggesting a cautious approach amid historically elevated levels.
