Gold hits new high as safe-haven demand surges, traders eye 4100
2025-10-08 20:51:11
On Wednesday (October 8), spot gold broke through the $4,000 mark, reaching a record high of $4,049.43 before retreating slightly. This rally was driven by strong safe-haven demand, driven by factors including the US government shutdown, falling Treasury yields, and political turmoil in Europe and Japan. With no resistance above, bulls currently see $4,100.00 as the next upside target.
Government shutdown and data delays keep Fed policy uncertain
As the US government shutdown entered its second week, US Treasury yields fell again. The 10-year Treasury yield fell to 4.104%, while the 30-year Treasury yield fell 3.1 basis points to 4.695%. The shutdown delayed the release of last Friday's jobs report and is likely to further delay the release of other key data, reducing market transparency ahead of the Federal Reserve's next meeting.
Despite mixed signals from Fed officials, futures markets are pricing in a 92% probability of a 25 basis point rate cut at the October Federal Open Market Committee (FOMC) meeting, with cumulative rate cuts expected to total approximately 110 basis points by the end of 2026. Traders will be closely watching the release of the FOMC minutes and upcoming speeches by Fed Governor Stephen Miran and Fed Chairman Jerome Powell for confirmation on policy direction.
Kansas City Federal Reserve Bank President Jeff Schmid opposed further rate cuts, saying current economic conditions do not support more easing policies. However, the market still tends to favor an easing stance, especially as economic growth uncertainty increases and the fiscal background deteriorates.
Dollar supported by political risks, gold unmoved
The dollar found buying support on Wednesday, with the dollar index climbing to 98.56. The move came as political news weighed on the euro and yen: the euro fell to $1.1662 after the French prime minister resigned, which could delay budget approval and complicate deficit control.
In Japan, the yen fell to 152.46, its lowest level since February. Markets are pricing in Sanae Takaichi's victory in the leadership election, with expectations that she will pursue aggressive fiscal spending policies. The probability of a Bank of Japan interest rate hike has fallen significantly, with markets now pricing in just a 26% chance of a hike later this month.
Even though the US dollar has strengthened, gold prices have remained strong, which shows that the current demand for gold buying is strong and has strong resilience.
Gold price outlook: Bulls are in control, but be wary of an overheated correction
(Source of spot gold daily chart: Yihuitong)
The gold market is currently extremely overbought, with the current price well above its 50-day moving average at $3,565.78. With no resistance above and strong upward momentum, bulls are expected to push towards $4,100.00 and even higher.
However, the market is showing signs of overheating. If traders start taking profits, it could trigger a short-term pullback, but this wouldn't necessarily change the overall upward trend. The current initial support level of $3,819.42 would only become effective in the event of a market reversal and is not currently a valid support level.
The overall market bias is bullish. We recommend maintaining long positions, but adopting flexible tactical strategies.
Government shutdown and data delays keep Fed policy uncertain
As the US government shutdown entered its second week, US Treasury yields fell again. The 10-year Treasury yield fell to 4.104%, while the 30-year Treasury yield fell 3.1 basis points to 4.695%. The shutdown delayed the release of last Friday's jobs report and is likely to further delay the release of other key data, reducing market transparency ahead of the Federal Reserve's next meeting.
Despite mixed signals from Fed officials, futures markets are pricing in a 92% probability of a 25 basis point rate cut at the October Federal Open Market Committee (FOMC) meeting, with cumulative rate cuts expected to total approximately 110 basis points by the end of 2026. Traders will be closely watching the release of the FOMC minutes and upcoming speeches by Fed Governor Stephen Miran and Fed Chairman Jerome Powell for confirmation on policy direction.
Kansas City Federal Reserve Bank President Jeff Schmid opposed further rate cuts, saying current economic conditions do not support more easing policies. However, the market still tends to favor an easing stance, especially as economic growth uncertainty increases and the fiscal background deteriorates.
Dollar supported by political risks, gold unmoved
The dollar found buying support on Wednesday, with the dollar index climbing to 98.56. The move came as political news weighed on the euro and yen: the euro fell to $1.1662 after the French prime minister resigned, which could delay budget approval and complicate deficit control.
In Japan, the yen fell to 152.46, its lowest level since February. Markets are pricing in Sanae Takaichi's victory in the leadership election, with expectations that she will pursue aggressive fiscal spending policies. The probability of a Bank of Japan interest rate hike has fallen significantly, with markets now pricing in just a 26% chance of a hike later this month.
Even though the US dollar has strengthened, gold prices have remained strong, which shows that the current demand for gold buying is strong and has strong resilience.
Gold price outlook: Bulls are in control, but be wary of an overheated correction
(Source of spot gold daily chart: Yihuitong)
The gold market is currently extremely overbought, with the current price well above its 50-day moving average at $3,565.78. With no resistance above and strong upward momentum, bulls are expected to push towards $4,100.00 and even higher.
However, the market is showing signs of overheating. If traders start taking profits, it could trigger a short-term pullback, but this wouldn't necessarily change the overall upward trend. The current initial support level of $3,819.42 would only become effective in the event of a market reversal and is not currently a valid support level.
The overall market bias is bullish. We recommend maintaining long positions, but adopting flexible tactical strategies.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
