Quick overview

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XAU/USD is currently trading at $3,885 as traders pause to process the move, extending its winning streak into a sixth consecutive day and up about 3.3 percent so far this week.

The basic background is still largely encouraging. The US government shutdown is keeping Treasury yields low and the US dollar (USD), in addition to encouraging safe-haven interest, which supports the argument for higher gold prices. Additionally, there is growing confidence that the Fed will lower interest rates later this month.

The US government shutdown is the main focus in the near future, and important economic data releases are already being delayed by disruptions.

This Thursday’s August factory orders and weekly Initial Jobless Claims are going to be postponed. The Nonfarm Payrolls (NFP) report for Friday is also unlikely to be released, as the Bureau of Labor Statistics (BLS) confirmed on Monday that it will halt operations during the shutdown.  The US government shutdown still dominates headlines with no end in sight.

Senate rules require 60 votes to pass a stopgap funding measure, and the Senate blocked it again on Wednesday after it passed the House.

The shutdown is expected to continue at least through the week and possibly longer, with senators departing Washington until Friday.

At least Fed Governor Lisa Cook remains in her position after the US Supreme Court on Wednesday blocked President Donald Trump’s attempt to fire her immediately.

I have reviewed the movements of gold futures in various time charts amid shifting economic conditions following the government shutdown and shifting geopolitical equations in the Middle East following Israel’s attack on the Quarter despite an uptrend in gold futures over the last six weeks following a low of $3357 on August 22.

This rally was in anticipation of interest rate cuts by the Federal Reserve of 25 basis points at its meeting on September 17, and there was a sudden surge in bets on rate cuts by the Fed this year.

Fed Chair Jerome Powell has already stated that there is “no risk-free path” for policy, warning of the dangers of cutting too quickly or too slowly.

Unquestionably, the Fed’s announcement of a quarter-point cut had a big effect on gold futures shortly after, causing a tumultuous move that fluctuated between gains and losses. The price hit a low of and a high of $3,744 shortly after the Fed’s rate announcement.