Wow! Gold Breaks $3,900, Ready to Break the $4,000 Record?
The global gold price surged to break the psychological level of US$3,900 per troy ounce during the Asian trading session on Monday (October 6th). This surge set a new record and confirmed gold's dominance as a safe-haven asset amidst increasing global uncertainty.
The price increase was driven by a combination of fundamental factors. First, the ongoing US government shutdown sparked concerns about fiscal stability and worsened market sentiment. Second, growing expectations that the Federal Reserve would cut interest rates to stem the economic slowdown made investors increasingly attracted to gold, due to the lower opportunity cost of holding non-yielding assets.
Furthermore, the weakening Japanese yen also played a significant role. The yen, traditionally a safe-haven alternative, lost its appeal, prompting capital flows to gold. Furthermore, massive buying by gold ETFs and central bank accumulation also strengthened the upward momentum.
Technically, gold successfully broke through strong resistance at US$3,900 on high volume. This breakout confirms the bullish trend, with the nearest target in the range of US$3,950 to US$4,000. The support level has now shifted to the US$3,900–3,850 area, which previously served as key resistance. However, the RSI indicator has entered the overbought zone, indicating the potential for consolidation or a short-term correction before resuming the rally.
Analysts believe that as long as fundamental factors such as political uncertainty and the prospect of interest rate cuts remain dominant, gold has the potential to maintain its upward trend. However, if there is a surprise in the form of strong US economic data or a hawkish stance from the Fed, the price could potentially correct again to the support area.
Source: Newsmaker.id
