Quick overview

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XAU/USD extended its rally to a new record-high above $4,000, continuing to ignore overbought conditions. Key U.S. inflation data may be delayed next week unless the government reopens, allowing risk perception and remarks from Fed officials to continue influencing XAU/USD’s performance in the near term.

The bullion asset surged to a record high of over $4,000  an ounce as investors seek safe havens to place their money due to global political and economic uncertainty.

Gold has experienced its largest rally since the 1970s, with a roughly one-third increase since US President Donald Trump announced tariffs in April that have disrupted international trade.

According to analysts, as the US government shutdown enters its second week, investors are also concerned about delays in the release of important economic data.

Gold is regarded as a “haven” investment that is likely to hold or even rise in value during periods of market volatility or economic downturns.

Trump reached agreements with the European Union, Japan, South Korea, and other major trading partners, which helped accelerate US-China trade negotiations before the tariff escalation. However, issues remained, particularly concerning the US’s stance on rare earths. The US had taken measures to prevent other nations from exporting semiconductor-related goods to China.

This week, the US announced port fees on Chinese ships, prompting Beijing to impose the same charges on US ships docking at Chinese ports.

Additionally, China began investigating the US chipmaker Qualcomm for potential antitrust violations. China’s commerce ministry announced that starting in December, foreign businesses wishing to export goods made with Chinese production technology or containing more than 0.1 percent rare earth materials will need to obtain a license.

China holds a monopoly on rare earths, producing over 90% of the processed rare earths and rare earth magnets used globally.

This dominance has given China substantial leverage over the United States. Historically, stock market sell-offs have led investors to seek refuge in the dollar, making the difference between the dollar and gold noteworthy. However, this trend did not hold during the recent trade war; instead, gold emerged as the preferred haven amid the chaos, similar to the aftermath of Liberation Day.