Gold approaches $4,000 as Fed cuts, US gridlock, and global tensions boost safe-haven demand

Gold (XAUUSD) is holding near record highs as policy risks and political tensions escalate. The U.S. government shutdown and lack of fresh economic data are unsettling markets. Meanwhile, uncertainty over the Fed’s next policy move is increasing demand for safe-haven assets. Looking ahead, markets expect a rate cut this month and another in December. Global developments, including Japan’s shift toward fiscal stimulus, are further strengthening gold’s appeal. Despite stronger equities and a firmer Dollar, gold remains a favored defensive asset in an increasingly uncertain environment.

Gold price stable near highs with Fed rate cuts, political gridlock, and policy shifts in focus

Gold continues to trade near all-time highs, maintaining strength despite ongoing market swings. Its stability reflects persistent safe-haven demand fueled by rising political and economic uncertainty. In particular, the ongoing deadlock in Washington has amplified investor concerns, with no resolution in sight between Republican and Democratic lawmakers. The extended shutdown is fueling fears about job losses and adding pressure on the weakening labor market. These unresolved tensions continue to unsettle markets and boost gold’s role as a defensive asset.

Meanwhile, key economic reports are delayed, leaving markets uncertain ahead of the Federal Reserve’s upcoming meeting. The Fed is widely expected to cut interest rates by 25 basis points at the October 28–29 meeting. In addition, markets are pricing in a near-certain chance of another rate cut in December. Gold is holding its ground, even with risk assets gaining momentum. A supportive Fed stance and U.S. political tension are keeping the metal in favor.

Global developments are further strengthening gold’s momentum. In Japan, the election of new LDP leadership signals a shift toward more expansionary fiscal policy. This shift has weakened the Yen and raised expectations for continued global monetary easing. The resulting policy divergence enhances gold’s appeal as a safe-haven asset. Looking ahead, market attention will remain on U.S. shutdown negotiations and upcoming private-sector data. Investors will also closely monitor Federal Reserve officials for policy signals. In the meantime, demand for gold as a haven is likely to remain strong.

Gold sustains uptrend within bullish channel after key $2,000 breakout

The gold chart below shows a strong and sustained uptrend, supported by well-formed technical structures. After an extended period of sideways consolidation, gold broke decisively above the key $2,000 pivot in late 2023. This breakout signaled a major structural shift and established the foundation for a lasting bullish phase.

Since then, gold has established a well-defined ascending channel that has remained in place for over a year. Within this structure, the price has climbed steadily, consistently reacting to both support and resistance levels. A symmetrical triangle later formed within the channel, serving as a classic consolidation pattern. The breakout from this formation sparked a sharp rally, pushing gold above the $3,800 level.

Importantly, gold has maintained key breakout levels on each pullback, validating the strength of the trend. The $2,000 breakout zone now acts as a strong long-term support base, while the midpoint of the channel continues to guide short-term price action. With momentum building and no significant resistance until the $4,000 psychological barrier, gold remains in a favorable technical position. A stable move along the upper boundary may extend the uptrend, and any decline toward $3,500 or $3,250 is expected to attract buyers.

Gold outlook: $4,000 target in focus as policy risks and uncertainty persist

Gold remains well-positioned as it approaches the $4,000 level. Despite a firmer Dollar and rising equities, the metal continues to attract strong demand. Meanwhile, political deadlock in Washington and delayed economic data are adding to uncertainty, keeping gold firmly in demand. Expectations for upcoming Fed rate cuts and continued global easing are strengthening gold’s bullish outlook. This combination of macro risks and policy shifts continues to drive gold’s upward momentum.

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