The rally has now carried spot gold well above its 50-day moving average at $3656.35, reinforcing the strength of the uptrend while also increasing the risk of a sharp correction. Still, with higher-highs and higher-lows intact, there’s no confirmed signal of a top. Short sellers attempting to fade based on overbought RSI have so far only added fuel to the bull case.
Safe-Haven Demand Surges on U.S.-China Trade Tensions and Government Shutdown
Renewed U.S.-China trade tensions have been a key driver of the latest leg higher. U.S. officials sharply criticized China’s expanded rare earth export controls, raising fears over global supply chain disruptions. The escalating trade rhetoric, combined with a protracted U.S. government shutdown now entering its third week, has intensified risk aversion.
Traders are also pricing in the economic toll of the shutdown, with the Treasury estimating losses of $15 billion per week. Economic uncertainty and declining policy confidence are sending investors toward gold as a hedge.
Fed Rate Cut Bets and Falling Yields Boost Gold’s Appeal
Expectations for Fed easing have hardened. Markets are now pricing in a 98% chance of a 25 basis-point cut in October, followed by a second cut in December. The dovish repricing comes as the Fed faces a data blackout due to the shutdown, limiting visibility ahead of its October 28–29 policy meeting.
Thursday’s weaker-than-expected Philadelphia Fed survey added to the case for cuts, with the index plunging 36 points to -12.8. Treasury yields dropped in response, with the 10-year yield falling to 4.011% and the 30-year at 4.603%, further lowering opportunity costs for holding non-yielding gold.
Gold Price Forecast: Bulls in Control Until Price Reversal Signals Emerge
With spot gold printing fresh highs above $4250 and no sign of a reversal, the bullish structure remains firmly intact. There’s no technical case for a fade unless we see a confirmed closing price reversal top. The trend is being fed by both fundamentals and positioning, and attempts to short into strength continue to get steamrolled. Unless gold breaks back below short-term levels closer to recent swing structure, the path of least resistance remains higher.