Quick overview

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The gold craze is reaching new heights as uncertainty grows amid the US government’s first shutdown in nearly seven years. Ahead of the shutdown starting overnight, the going price of New York spot gold, the benchmark for valuing precious metals, reached a record $3,858.45 per troy ounce as of Tuesday’s market close.

Additionally, as of midday trading on Wednesday, futures were still rising, dancing around the $3,900 mark.

According to momentum indicators, gold is flirting with overbought conditions, but in this context, it would be like declaring a rocket overfueled just before launch. Short-term pullbacks are suggested by the 14-day RSI, which is currently at 75 (anything above 70 indicates “overbought”). Support is at $3,820–$3,819, but the daily chart has broken a one-week ascending trendline. The MACD lines are sharply rising but show slight divergence.

Analysts warn of a potential “long unwinding” decline, possibly down to $3,761 by early October. The RSI is at its lowest since February, according to Forex.com, preventing it from reaching full-blown overbought exhaustion.

The surprising part is that overbought conditions have persisted for weeks without derailing the uptrend. Investors, focused on fundamentals, are dismissing these signals.

When nervous investors seek “safe havens” to park their money, gold sales can surge. The asset and other metals, such as silver, had experienced greater gains over the previous 12 months, especially since President Donald Trump’s slew of tariffs had left much of the world in economic limbo. It comes down to a lot of uncertainty.

Anxiety among investors typically results in a spike in interest in metals like gold. Trump’s trade wars have largely contributed to the recent economic unrest.

The president imposed steep new tariffs on goods entering the United States. This has put pressure on consumers and businesses worldwide, increasing costs and depressing the labor market. As a result, hiring has slowed, and inflation is gradually rising again. Additionally, more customers are expressing pessimism about the future.

A government shutdown in the U.S. could worsen these concerns.

The Labor Department’s important jobs report, which was supposed to be released on Friday, is likely to be delayed.

The shutdown could also have a nationwide negative economic impact, with Trump’s Republican administration planning to furlough about 750,000 federal employees, some of whom might be laid off. Many offices could also be closed, possibly permanently..