Gold Price Forecast: XAU/USD’s bullish run continues amid political uncertainty

XAU/USD Current price: $3,982.33

• The United States government shutdown continues, fueling demand for safety.
• The FOMC September meeting Minutes will be out on Wednesday.
• XAU/USD retains its positive momentum despite extreme overbought conditions.

XAU/USD consolidates gains after flirting with the $4,000 mark on Tuesday, as global political uncertainty fuels demand for the safe-haven metal. Gold traded as high as $3,991.08 early in the American session, retreating modestly afterwards.

There were no new developments that pushed Gold higher, but continued political uncertainty. On the one hand, the United States (US) government shutdown continues, following yet another failed Senate vote on a funding bill on Monday.

Other than that, several Federal Reserve (Fed) officials hit the wires. Bank of Minneapolis President Neel Kashkari cautioned that it's still too soon to be able to tell if tariff-led inflation will be sticky or not. Also, Board of Governors member Stephen Miran noted that monetary policy should be forward-looking, given the lags of policy impact, adding that most of the economic uncertainty has been lifted. Finally, he added his best attempt at a real neutral rate estimate is 0.5%, far below the current 4.0% 4.25% range.

The Federal Open Market Committee (FOMC) will release the Minutes of the September meeting on Wednesday, with the document expected to shed some light on policymakers’ thinking.

XAU/USD short-term technical outlook

XAU/USD is up for a third consecutive day, and technically bullish despite extreme overbought conditions. In the daily chart, the Relative Strength Index (RSI) indicator continues to advance at 85, while the Momentum indicator aims north almost vertically, far above its midline. At the same time, the pair develops above all bullish moving averages, with the 20 Simple Moving Average (SMA) currently at $3,763.

The 4-hour chart shows that XAU/USD could extend its advance, as technical indicators turned flat after correcting extreme conditions, now consolidating in overbought territory. As is the case in other time frames, the pair develops above all bullish moving averages, which reflects buyers’ dominance, regardless of overbought conditions.

Support levels: 3,958.40 3,946.50 3,927.70

Resistance levels: 3,991.10 4,005.00 4,020.00