By Areena FxGold (XAUUSD) climbed to all-time highs as markets reacted to growing political divisions in the US. The threat of a government shutdown has pressured the U.S. Dollar and raised fears of delayed economic reports. Markets now face the possibility that September’s labour data may not be released on time, leaving the Federal Reserve without a crucial policy guide. At the same time, stronger U.S. growth and spending figures have reduced expectations for deep rate cuts. This combination of political risk and shifting policy signals has kept gold firmly in focus as a leading safe-haven.
Gold surges to record highs on US shutdown risk and Dollar weakness
Gold reached historic levels as safe-haven flows intensified due to rising political instability in Washington. The growing risk of a government shutdown highlights deep divisions in Congress and raises the possibility of delayed economic reports. Markets now fear that the September labour market data could be postponed, leaving the Federal Reserve without crucial guidance.
Meanwhile, recent US data underscored the economy’s strength, with GDP growth and consumer spending beating forecasts. The strength of these indicators has reduced expectations for aggressive Fed rate cuts. Markets now price in roughly 40 basis points of easing by December, down from earlier projections of two cuts. Even so, the Dollar remains under pressure as the threat of a government shutdown adds fresh uncertainty.
Attention is now turning to key US data releases, including job openings, private payrolls, and ISM surveys. These reports will gauge the strength of the labour market and the broader economy. In particular, the upcoming Nonfarm Payrolls report, if released on time, carries significant weight for the Federal Reserve’s policy path. Softer results would reinforce the case for easing, while stronger figures could delay rate relief. In both cases, gold holds a favourable position as investors look for safety in an uncertain environment.
Gold breakout above $3,500 sets path toward $4,000 in ascending channel
The gold chart below shows a decisive breakout within a well-defined ascending channel, strengthening the bullish case. Throughout 2025, prices followed a clear pattern of higher highs and higher lows, reflecting steady buying pressure. Additionally, a key pivot formed at $3,500, acting as resistance during multiple failed rallies. Finally, in September, gold cleared this barrier with strong momentum, turning resistance into support.
Following the breakout, price quickly advanced toward the upper half of the channel. Currently, gold is trading near $3,810, holding firmly above its breakout zone. Moreover, the $3,500 pivot has become a solid support level, establishing a strong foundation for further upside. Additionally, channel projections indicate further gains, with the upper boundary targeting the $4,000 area. A continued move in that direction would confirm an acceleration of the bullish trend.
Moreover, the midline of the channel, marked by the dashed trendline, continues to guide momentum. As long as gold trades above this level, the technical outlook remains favourable for the bulls. Even a pullback toward $3,500 would not weaken the broader uptrend, so long as support holds firm. Overall, the setup combines macro-driven safe-haven demand with technical confirmation, highlighting gold’s sustained strength.
Gold outlook: Record highs signal strong support for extended upside
Gold touched all-time highs as markets turned defensive in the face of political and monetary instability. The breakout above $3,500 confirmed strong momentum and established a solid base for more gains. Currently, gold is holding firm near $3,810, with chart projections indicating a potential rise to $4,000. Additionally, the alignment of technical strength and fundamental support keeps the metal well-positioned for continued upside. This backdrop highlights gold’s importance as a key safe haven in volatile markets.