Market analysts attribute this surge to persistent safe-haven flows, as traders hedge against volatility in equities and currencies. “Markets are increasingly pricing in policy easing and slower growth, which keeps demand for non-yielding assets like gold strong,” said a commodities strategist at OANDA.
US Economic Strain and Policy Shifts
Concerns over a prolonged U.S. government shutdown and weakening macro indicators have amplified demand for precious metals. The Senate’s continued failure to pass a short-term funding bill has deepened fears of reduced consumer confidence and delayed economic data, clouding the outlook for growth.
At the same time, the Federal Reserve is signaling a dovish tilt. Chair Jerome Powell recently acknowledged labor market softening, while Governor Christopher Waller said inflation is nearing the central bank’s 2% target. These comments fueled expectations of back-to-back 25-basis-point rate cuts at the Fed’s October and December meetings. A weaker U.S. dollar, which has fallen to a one-week low, has further supported gold and silver prices.
Trade Tensions and Global Uncertainty
Renewed trade friction between the U.S. and China is another driver of bullion demand. Recent tariff threats and export restrictions have intensified concerns about global supply chains. Meanwhile, broader geopolitical tensions across Eastern Europe and other regions have reinforced gold’s role as a hedge against instability.
Short-Term Forecast
Gold (XAU/USD) is expected to consolidate between $4,280 and $4,400 before attempting another breakout, while Silver (XAG/USD) may retest $53.40 support before targeting $54.50 and $55.40. Traders are now watching upcoming Fed communications, U.S. labor data, and global trade updates for cues on the next directional move.