Gold Is above $4000

Gold prices rose 3.8% to $4,033 per troy ounce this week, though such gains have almost become routine as the metal continues setting fresh all-time highs nearly every other day over the past six weeks. The latest record was reached on Wednesday at $4,059 per ounce. The rally accelerated sharply from October 1, following the start of the U.S. government shutdown and the release of weak ADP Nonfarm Payrolls data for September. Gold broke above resistance at $3,780, jumping 2.0% to $3,835 in a single session, which confirmed a move toward the next target at $3,860–$3,880 per ounce.

That level held briefly until Monday, when it was decisively breached after Sanae Takaichi became Japan’s first female Prime Minister. She is widely regarded as a supporter of accommodative fiscal and monetary policy, leading markets to expect a pause in rate hikes by the Bank of Japan and a slower pace of balance sheet reduction. This additional dovishness, combined with growing political instability in France—where Prime Minister Sébastien Lecornu resigned just one month into office, marking the third government resignation this year—fueled further risk aversion and added support for gold. The metal broke above $3,860–$3,880 and quickly advanced toward the $3,960–$3,980 resistance zone before pushing beyond $4,000 per ounce.

Technical overbought conditions are now extreme, surpassing anything seen in gold’s modern trading history since the 1970s. Despite this, momentum remains strong, and even an extension toward $4,300–$4,400 cannot be ruled out. The recently released minutes from the Federal Reserve’s September FOMC meeting revealed intense internal debate but also a fragile consensus favouring further rate cuts in 2025 amid a cooling labour market. This outlook remains supportive for gold, though largely priced in.

Meanwhile, U.S. President Donald Trump announced a preliminary peace agreement between Israel and Hamas. Gold dipped slightly on the news, though the broader uptrend remains intact. The current rally began following the Hamas attack on October 7, 2023, and the subsequent conflict in Gaza, leaving a significant open gap at $1,832 per ounce.

Markets now turn their attention to Fed Chair Jerome Powell’s upcoming speech on Thursday. Investors will watch closely for any signs of a softer stance amid weakening economic and labour market data. Powell’s tone has eased in his past two appearances; if this continues, gold may set another record and test resistance at $4,060–$4,080 per ounce. Large investors have slightly reduced their exposure, with inflows into the SPDR Gold Trust (GLD) ETF totalling $1.1 billion last week but showing $178.2 million in outflows this week. Though modest, this may indicate growing caution among major players who are beginning to take profits as the market reaches historically stretched levels.