Gold price prediction: XAU extends record run above $3,900 amid U.S. shutdown concerns

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Gold price amid U.S. shutdown and Fed rate cut bets

Highlights

- Gold hits record highs above $3,900 as U.S. government shutdown extends into a second week.

- Fed rate cut bets at 95 percent for October and 84 percent for December reinforce safe-haven demand.

- A breakout above $3,940 to $3,960 could drive gold toward the $4,000 psychological level.

According to CME FedWatch data, futures now price a 95 percent chance of a 25-basis-point cut in October and an 84 percent probability of another by December. This dovish outlook has intensified demand for safe-haven assets, with gold emerging as the primary beneficiary.

Technical structure holds firm

Gold price remains inside a well-defined rising channel on the 4-hour chart, extending an uptrend that began in mid-August. After breaking higher last week, the metal is testing the upper boundary near $3,940 while consolidating above key short-term supports.The 20-period EMA at $3,876 and the 50-period EMA at $3,828 provide near-term support, while the 100-period EMA at $3,760 coincides with the channel’s midline. A sustained break below these levels could trigger a correction toward $3,656, the 200-EMA zone that represents the broader trend base.

XAU price dynamics (Source: TradingView)

Momentum remains strong, with the RSI hovering near 69, close to overbought but consistent with readings seen during prolonged rallies. A breakout above 70 would confirm continued buying strength and could keep gold’s focus on the $3,940–$3,960 zone before a potential move toward the psychological $4,000 mark.

Macro conditions reinforce safe-haven demand

The macro backdrop continues to support the rally. The U.S. government shutdown has curtailed key data, including the September nonfarm payrolls report, leaving markets to rely on secondary indicators that already suggest softening labor conditions.

Meanwhile, dovish shifts in Fed expectations have added fuel to gold’s momentum. Investors are increasingly betting on multiple rate cuts before year-end, which, combined with lower Treasury yields, have made non-yielding assets like gold more attractive.

In addition, structural factors such as persistent central bank accumulation and steady ETF inflows are adding to the long-term bullish case. The Silver Institute and World Gold Council both highlight continued strength in institutional buying, offsetting some profit-taking among retail traders.

Outlook and key levels

The near-term bias remains firmly bullish as gold consolidates within its rising channel. A decisive break above $3,940 to $3,960 would pave the way toward the $4,000 psychological milestone, while a retreat below $3,876 could trigger profit-taking. Broader structure remains intact as long as prices hold above $3,760.

In previous discussions, gold was observed maintaining strong momentum despite overbought signals, a trend that continues to hold. Unless political tensions ease or the Fed signals restraint on rate cuts, the rally shows few signs of exhaustion.

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