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• Gold touches a fresh all-time high on Wednesday amid a combination of supporting factors.
• The US government shutdown, geopolitical risks, and dovish Fed underpin the commodity.
• The USD touches a one-week trough and further acts as a tailwind for the precious metal.

Gold (XAU/USD) struggles to capitalize on its modest intraday uptick and oscillates in a narrow band below the all-time peak touched earlier this Wednesday as bulls pause for a breather amid extremely overbought conditions. Moreover, the supportive fundamental backdrop suggests that any corrective pullback might still be seen as a buying opportunity, and the path of least resistance for the commodity remains to the upside.

Against the backdrop of rising geopolitical tensions, a partial US government shutdown turns out to be a key factor that should continue to act as a tailwind for the safe-haven Gold. Furthermore, the US Dollar (USD) selling remains unabated on the back of bets that the US Federal Reserve (Fed) will cut interest rates twice by the year-end, which further offers support to the non-yielding yellow metal and validates the positive outlook.

Daily Digest Market Movers: Gold bullish bias seems intact amid supportive fundamental backdrop
 

• Gold has risen by an impressive 45% since the beginning of 2025 and recorded gains exceeding 11% in September as profound market uncertainty continues to drive investors globally to seek refuge in traditional safe-haven assets.
• A Republican spending bill failed to pass through the Senate on Tuesday, setting the stage for a partial government shutdown from midnight. A prolonged shutdown could have an adverse effect on economic performance.
• This could further encourage more easing from the US Federal Reserve, which, in turn, is seen driving flows towards the non-yielding yellow metal and contributing to the recent strong positive move to a fresh all-time high.
• According to the CME Group's FedWatch Tool, traders are currently pricing in a nearly 95% chance of an interest rate cut at the next FOMC meeting in October and an over 75% probability of another rate reduction in December.
• The expectations seem unaffected by hawkish comments from Dallas Fed President Lorie Logan, saying that anchored inflation expectations cannot be taken for granted and that he plans to exercise caution in further reductions.
• The US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday that the number of job openings on the last business day of August stood at 7.22 million vs 7.2 million estimated.
• Russian officials said on Monday that a move to supply US Tomahawk cruise missiles to Ukraine, for strikes deep into its territory, could trigger a steep escalation. This keeps geopolitical risks in play and benefits the safe-haven bullion.

Gold technical setup suggests that any corrective slide could be seen as buying opportunity
 

From a technical perspective, the overnight goodish rebound from sub-$3,800 levels and the subsequent move up validate the near-term positive outlook for the Gold price. That said, the daily Relative Strength Index (RSI) remains well above the 70 mark and points to extremely overbought conditions. This, in turn, makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for any further appreciating move.

Meanwhile, any corrective slide below the $3,835 immediate support is more likely to attract some buying near the $3,816 area, representing a short-term ascending trend-line. Some follow-through selling, leading to a subsequent breakdown and acceptance below the $3,800 mark, could pave the way for deeper losses and drag the Gold price to the next relevant support near the $3,758-3.757 region. The downfall could extend further towards the $3,735 support before the XAU/USD eventually drops to the $3,700 round figure.

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