Gold (XAU/USD) extended its record-breaking run on Thursday, climbing above $4,250 per ounce for the first time as investors piled into safe-haven assets amid renewed US-China trade tensions and expectations of further monetary easing from the Federal Reserve (Fed). At the time of writing, XAU/USD trades near $4,253 — up nearly 10% this month and more than 60% so far this year.
The metal’s explosive rally underscores mounting investor anxiety over the global economic outlook as geopolitical and fiscal risks intensify.
Trade war escalation fuels safe-haven flows
Risk sentiment deteriorated sharply after US President Donald Trump announced plans to impose 100% tariffs on all Chinese imports beginning November 1, reigniting fears of a full-blown trade war. The move came in retaliation to Beijing’s tighter export controls on rare earth elements, a critical component in technology manufacturing, amplifying concerns over supply chain disruptions and slower global growth.
Trump described the situation as “a full-blown trade war” on Wednesday, emphasizing that “if we didn’t have tariffs, we would be exposed as being a nothing.” Despite the tough rhetoric, US Treasury Secretary Scott Bessent sought to calm markets, confirming that the planned meeting between Trump and Chinese President Xi Jinping later this month in South Korea remains on track. He added that Washington may consider delaying the tariff implementation if Beijing moderates its export restrictions.
Shutdown impasse and Fed policy bets add pressure
The prolonged US government shutdown, now entering its third week, continues to weigh on market sentiment. The Senate failed for the ninth time on Wednesday to pass a GOP-backed funding bill, while the White House warned that federal layoffs could exceed 10,000 employees if the stalemate drags on. The Treasury estimates the shutdown is costing the US economy up to $15 billion per week.
At the same time, the US Dollar and Treasury yields remain under pressure as investors increasingly expect the Fed to adopt a more accommodative stance. The CME FedWatch Tool shows a 96.7% probability of a 25-basis-point rate cut at the October 29–30 FOMC meeting and a 93.7% chance of another cut in December.
Fed Governor Stephen Miran said Thursday that while tariffs could eventually add inflationary pressure, he sees no concrete signs of that yet. He maintained his growth projection at roughly 2% for 2025, noting that the 2026 outlook hinges heavily on how US-China tensions evolve.
Analysts turn increasingly bullish on gold
Major banks are raising their long-term price targets for gold amid growing uncertainty and continued policy easing expectations.
- Bank of America now forecasts gold to reach $5,000 per ounce by 2026,
- Goldman Sachs expects $4,900 by the end of 2026, and
- ANZ Bank projects $4,400 by late 2025, with a potential peak near $4,600 by mid-2026.
Technical outlook: momentum remains strong despite overbought signals
From a technical perspective, gold’s uptrend remains firmly intact, supported by robust momentum and consistent buying on dips. XAU/USD continues to trade well above its short- and long-term moving averages, reflecting sustained bullish control.
Immediate support lies around $4,200, followed by the $4,150–$4,160 zone — an area that aligns with the 21-period SMA on the 4-hour chart. Deeper pullbacks toward the 50-SMA near $4,065 appear unlikely in the near term, given the market’s strong upward bias.
The Relative Strength Index (RSI) remains elevated near 77, suggesting overbought conditions. However, despite a mild divergence between price and momentum, any correction is expected to be limited as long as the broader macro narrative favors risk aversion and policy easing.
