Peter Smith
Gold prices jumped nearly 2% on Monday, blowing past the previous record and hitting $3,833 per ounce. The catalyst? Pure political chaos. With Washington on the brink of a federal shutdown, investors aren't taking chances - they're piling into the ultimate safe haven. Add in falling Treasury yields and a weakening dollar, and you've got the perfect storm for gold bulls.
Breaking Records While Washington Burns
Trader EMILY WEEKS caught the breakout early, noting gold's push past the September 23rd high of $3,791. This isn't just another rally - it's a statement about how nervous markets really are. Bloomberg threw fuel on the fire by reporting that a shutdown would freeze the Bureau of Labor Statistics, meaning no jobs data, no inflation reports, nothing. When the market loses its eyes and ears, it reaches for gold.
The technicals tell a clear story. Gold's been climbing steadily, leaving its moving averages in the dust - the 55-day sits at $3,473, the 100-day at $3,406, and the 200-day way down at $3,180. Everything's pointing up. The RSI just hit 78.87, which screams overbought, but here's the thing: the ADX is reading 49.47, confirming this trend has serious legs. When you see overbought conditions paired with that kind of directional strength, it means the bulls are fully in control even if a breather is coming.
Why Everyone's Buying
The drivers behind this surge:
- Shutdown panic: Political dysfunction is pushing money into defensive plays
- Yield collapse: Lower Treasury rates make gold more attractive since it doesn't pay interest
- Dollar weakness: A softer greenback amplifies gold's gains for international buyers
- Data blackout risk: Traders are hedging against flying blind if government stats go dark
Breaking $3,833 raises the obvious question: can it keep climbing? If shutdown fears intensify and yields keep falling, $3,900 to $4,000 isn't crazy talk. But if Washington pulls off a last-minute deal or profit-takers show up, we could see a quick drop back to $3,750 or even $3,700. The momentum is there, but so is the risk of a sharp reversal. Right now though, fear is winning, and gold is the beneficiary.
Peter Smith
