Gold (XAU/USD) extended its winning streak for a fourth straight session on Tuesday, hitting fresh record highs above $3,870 during Asian trading. The safe-haven metal remains strongly bid as geopolitical tensions intensify and expectations of further US Federal Reserve rate cuts keep investors flocking to bullion.
Safe-Haven Demand Drives Gold Higher
Mounting geopolitical risks continue to underpin gold’s appeal. Concerns over a looming US government shutdown add to safe-haven flows, while the US Dollar remains under pressure from dovish Fed expectations, providing additional support to the metal. Despite overbought signals on short-term charts, momentum remains firmly upward, with traders now awaiting key US data—including Friday’s Nonfarm Payrolls (NFP)—for fresh direction.
Market Movers: Political Deadlock and Rising Global Risks
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US Budget Stalemate: Talks between President Donald Trump and congressional leaders ended without progress, with Vice President J.D. Vance warning that a shutdown now looks inevitable.
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Russia-Ukraine Conflict: Moscow warned of steep escalation if the US supplies Tomahawk missiles to Ukraine, further fueling geopolitical concerns.
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Middle East Tensions: Trump said the US is close to brokering peace in Gaza with a 20-point plan, while cautioning Hamas of Washington’s full backing for Israel if the deal is rejected.
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Trade Moves: Trump signed a new proclamation targeting timber and lumber imports, following last week’s tariffs on pharmaceuticals and heavy-duty trucks, highlighting ongoing trade frictions.
Fed Outlook Supports Bullion
According to the CME FedWatch Tool, markets now assign a 90% probability of a 25-basis-point rate cut in October and a 70% chance of another cut in December. Lower borrowing costs keep the Dollar weak and sustain the bullish case for gold.
Technical View: Bulls in Control Above $3,800
Gold’s breakout and close above the $3,800 psychological mark acted as a fresh catalyst for buyers. Subsequent gains past $3,850 strengthen the near-term bullish outlook.
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Upside Levels: Sustained trade above $3,870 could open the door to further advances in the coming sessions.
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Overbought Risk: The daily RSI near 80 signals stretched conditions, raising the chance of short-term consolidation.
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Support Zones: A dip below $3,850 may attract fresh buying around $3,835–3,834, with deeper support at $3,822 and the key $3,800 level. A decisive break under $3,800, however, could trigger sharper losses.
⚖️ Summary: With geopolitics heating up, US budget uncertainty unresolved, and Fed rate cuts priced in, the fundamental and technical setup for gold remains overwhelmingly bullish, even as overbought signals hint at short-term consolidation.
