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Gold (XAUUSD) is surging to record highs as political gridlock, trade friction, and global tensions deepen market uncertainty. The prolonged U.S. government shutdown and renewed U.S.–China trade disputes are weighing on confidence. At the same time, rising geopolitical risks and dovish signals from the Federal Reserve are fueling safe-haven demand. These developments are propelling gold to historic highs, reinforcing its role as the ultimate safe-haven asset.
 

Gold Climbs to New Highs amid U.S. Government Shutdown and Trade Disputes
 

Gold extends its record run, supported by market volatility and deepening political uncertainty. The ongoing U.S. government shutdown has now entered its third week, amplifying concerns across financial markets. Lawmakers have failed nine consecutive times to pass a stopgap funding bill, deepening the political gridlock. According to a Treasury update, the extended shutdown may reduce U.S. output by $15 billion each week. This extended gridlock is weighing heavily on market confidence, increasing the risk of broader economic instability.

Meanwhile, trade tensions between the U.S. and China are flaring up again. Both countries introduced reciprocal port fees, putting additional strain on an already fragile trade relationship. Trump threatened to suspend cooking oil exports to China in response to Beijing’s refusal to resume soybean imports. At the same time, Treasury Secretary Scott Bessent signaled that the U.S. could ease tariffs if China delays its rare-earth export restrictions. These developments have renewed concerns about a broader economic clash between the U.S. and China.

Moreover, geopolitical tensions continue to drive safe-haven demand for gold. U.S. Defense Secretary Pete Hegseth issued renewed warnings to Russia over its actions in Ukraine. Former President Trump also suggested providing Kyiv with long-range cruise missiles. Additionally, Fed Chair Jerome Powell pointed to continued weakness in the labor market, strengthening the case for rate cuts later this year. This combination of dovish policy signals and geopolitical strain is driving sustained demand for gold.

Gold Confirms Multi-Decade Cup-and-Handle Breakout, Signals Powerful Bull Market
 

The gold chart below shows a well-defined cup-and-handle formation that has taken shape over multiple decades. The “cup” developed between the 1980 peak and the early 2010s. Following the sharp reversal from the 1980 high, gold entered a prolonged period of consolidation marked by broad sideways movement. After that, the price began a gradual and sustained rise, forming the right side of the cup. This upward trajectory gradually completed the cup structure and positioned gold just below its multi-decade resistance.
 

The “handle” portion of the pattern developed through a broad, rounded consolidation just beneath long-term resistance. As the formation developed, gold traded in a compressed range near key resistance, reflecting growing potential for a sharp breakout. This tightening setup signaled building momentum and set the stage for gold to challenge its long-standing resistance.

In 2024, gold decisively broke above the neckline, confirming a major structural shift. The breakout was clean and well-structured, backed by rising volume and consistent follow-through. Importantly, the breakout cleared a long-standing resistance zone that had capped rallies for decades. That barrier has now flipped into support, strengthening the long-term outlook. This breakout marks the start of a new phase in gold’s bull market, carrying the potential for significant upside over the coming years.

Gold Outlook: Structural Breakout Signals Powerful New Phase with Macro Support
 

Gold remains in a powerful uptrend, supported by escalating political and economic risks. The deepening U.S. government shutdown, renewed trade tensions with China, and mounting geopolitical threats have created a volatile environment that favors safe-haven assets. Meanwhile, dovish signals from the Fed are adding fuel to the rally. This combination of macro catalysts continues to drive gold toward new record highs, solidifying its role as a reliable hedge in uncertain times. 

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