• Gold forecast broke above $3,800 amid US shutdown risks and a weaker dollar.
• Fed rate cut bets remain firm, with markets pricing in easing in October and December.
• Haven demand, ETF inflows, and central bank buying maintain an upside bias.

Gold prices marked fresh record highs above $3,800 at the start of the week, supported by mounting fears of a US government shutdown and renewed bets that the Fed would cut rates twice this year. The weaker dollar provided fuel for the gold rally, with the Dollar Index slipping below 98.00, making gold cheaper for foreign buyers.

Friday’s US Core PCE inflation met the expectations, holding steady near 2.9% y/y, reinforcing the expectations of two more rate cuts by the Fed in October and December. Market participants are now anticipating a 90% probability of easing in October. Meanwhile, Fed officials are due to speak this week, which could set the tone for market expectations.

The political chaos in Washington, with a looming shutdown on October 1st, has further intensified the demand for safe havens. A shutdown could delay the release of September NFP data, and a prolonged period could disrupt economic activity. That backdrop has triggered strong inflows into gold-backed ETFs, with SPDR Gold Trust soaring to its highest level since 2022. Central banks in India, China, and Turkey are actively buying gold, shifting away from the US dollar.

Gold prices have gained 45% year to date, while Goldman Sachs and Deutsche Bank forecast the cost to extend above $4,000 into 2026. Momentum is also spilling into other precious metals, pushing silver and platinum to multi-year highs.
 

Key Events to Watch for Gold

Looking ahead, the gold traders are keenly watching:

• RBA policy meeting (Tuesday)
• US ADP data (Wednesday)
• US NFP data (Friday)

Meanwhile, speeches from the Fed and ECB are also key to watch, along with geopolitical updates from the Gulf and Europe.
 

Gold Technical Forecast: Room to Test $4,000

(Click on image to enlarge)

Gold 4-hour chart
 

Gold remains firm above the $3,800 level with a key support at the recent swing high of $3,788. The prices are well above the 20-period MA on the 4-hour chart, suggesting room for more upside. However, the extended distance between 20-MA and the current price indicates a probability of consolidation here before a further upside. The buyers are broadly aiming to mark highs around $4,000 in the medium term.

On the other hand, a pause in the uptrend and a pullback below the $3,788 level could gather selling momentum and test the order block and 50-period MA at $3,725, ahead of $3,700.

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