Gold prices surged to record highs, climbing around the $4,060 mark in early Asian trading on Monday, as renewed US-China trade tensions and Federal Reserve rate cut expectations boosted investor demand for the safe-haven metal. The continued US government shutdown and global uncertainty further strengthened gold’s appeal among traders and investors seeking stability in a volatile environment.
Last week, market sentiment turned cautious after President Donald Trump threatened a 100% tariff on Chinese exports, reigniting trade war fears. China responded firmly, warning of counteractions, yet Trump toned down his stance over the weekend, suggesting the US does not wish to harm China’s economy. Despite this, investors remain wary of potential disruptions to trade talks between the two largest economies.
Adding to the tension, Trump hinted at supplying Tomahawk missiles to Ukraine, intensifying geopolitical risks. Meanwhile, the prolonged US shutdown—set to enter its third week with no resolution in Congress—continues to pressure the US Dollar, amplifying gold’s safe-haven strength.
According to the CME FedWatch Tool, traders expect nearly 96% odds of a rate cut in October and 87% in December, weakening the dollar and pushing non-yielding assets like gold higher. The XAU/USD pair is set to stay bullish as demand for gold remains strong amid monetary easing expectations and market uncertainty.
Technical charts show the metal holding above its key support near $4,000 in Gold trading , maintaining a long-term uptrend. Any short-term dips are likely to invite fresh buying interest as investors continue to favor gold amid rising geopolitical stress and economic instability.
