Key Points
- Spot gold rose 0.3% to $3,997.43 after touching a record intraday high of $3,999.36.
- Analysts warn the “melt-up” could pause if prices fail to break above the $4,000 resistance level.
Gold’s relentless rally continued on Wednesday, with prices hovering just below the $4,000 per ounce mark. Spot gold climbed 0.3% to $3,997.43, having earlier set a new record intraday high of $3,999.36, according to ICE data.
The surge comes as traders continue to pile into safe-haven assets amid persistent global uncertainty, including political upheavals in Japan and France, as well as the ongoing U.S. government shutdown.
A weaker dollar and expectations of further Federal Reserve rate cuts have also fuelled bullion’s ascent, now extending into a multi-week “melt-up” phase.
A breakout above this channel would be a bullish sign for a continuation of the quickening uptrend. However, our research desk cautioned that failure to sustain momentum at this level could lead to a short-term pullback.
Technical Analysis
Gold (XAU/USD) continues its impressive rally, now trading near $3,993.91, up 0.24% on the day and just shy of the crucial $4,000 psychological level. This surge marks a continuation of the strong uptrend that began in early August, with gold gaining over 20% since breaking out above the $3,400–$3,500 resistance zone.
The market’s momentum remains robust as traders hedge against ongoing macro uncertainty, a weakening dollar, and persistent concerns surrounding fiscal instability in the U.S.
From a technical standpoint, the bullish structure remains intact. Price action continues to ride above all key moving averages (5-, 10-, and 30-day MAs), showing sustained buying interest and consistent higher highs.
The MACD remains well in bullish territory, with the signal line comfortably below the MACD line and green histogram bars expanding, a clear sign of accelerating upward momentum.
However, traders should note that the rally is approaching overextended territory, with gold nearing a major resistance at $4,000, which could trigger short-term profit-taking.
A temporary pullback toward $3,850 or even $3,700 would not disrupt the broader bullish narrative but could offer more attractive re-entry points for trend followers. On the downside, strong support lies near $3,327, aligning with previous consolidation zones and the 30-day moving average.
Cautious Forecast
Fundamentally, gold’s rise reflects sustained safe-haven demand amid softening global growth data and a cautious Federal Reserve stance.
The ongoing U.S. government shutdown concerns and slowing dollar strength are providing additional tailwinds.
