Gold Rally Strong, But Beware of Risks of Ending US Deadlock
Gold prices continued to strengthen in today's trading, driven by growing concerns about a potential government shutdown in the United States and expectations that the Federal Reserve will soon cut interest rates in the coming months.
According to a Reuters report, fiscal uncertainty due to the political deadlock in Washington has prompted global investors to turn to safe-haven assets such as precious metals. If Congress fails to reach a budget agreement before October 1, the US federal government risks being partially paralyzed. This situation has fueled a "flight to safety" sentiment that has historically benefited gold.
Furthermore, market expectations that the Fed will cut interest rates in the final quarter of 2025 have also put pressure on the US dollar. A weaker dollar automatically increases gold's appeal to foreign buyers, thus supporting price increases.
Technically, gold remains bullish. Daily indicators show a strong buy signal, with key support around USD 3,850 per troy ounce. If this level is maintained, gold prices have the potential to test the next resistance area in the USD 3,880–3,900 per troy ounce area. Conversely, a decline below this support could trigger a correction towards USD 3,820 before a potential rebound.
In addition to macroeconomic factors, gold purchases by central banks and institutional investors are also adding pressure to demand. Amidst geopolitical uncertainty and persistently subdued inflation, the precious metal remains a key hedge.
Analysts believe that as long as US fiscal uncertainty persists and the prospect of monetary easing remains open, gold prices have the potential to extend their rally towards a new record. However, volatility remains a concern, especially if political developments in Washington produce any last-minute surprises.
Source: Newsmaker.id
