Gold (XAU/USD) climbed to a new all-time high above the $3,800 mark during Monday’s Asian and early European sessions. The surge comes as investors flock to the precious metal amid rising fears of a potential U.S. government shutdown and growing expectations of Federal Reserve rate cuts later this year.

Gold’s appeal as a non-yielding safe-haven asset has strengthened as U.S. inflation data met market expectations, reinforcing bets that interest rates will move lower. Lower rates reduce the opportunity cost of holding gold, making it more attractive to both institutional and retail investors.

U.S. Government Shutdown Concerns Drive Safe-Haven Demand

Markets remain on edge as Washington faces a looming government shutdown. U.S. President Donald Trump is scheduled to meet top congressional leaders at the White House on Monday to avert a closure as funding deadlines approach. Without an agreement, parts of the federal government could shut down on Wednesday, the first day of the 2026 fiscal year.

Heightened political uncertainty typically benefits gold prices, and traders are positioning accordingly. As geopolitical and economic risks intensify, gold continues to hold its safe-haven status.

Key Fed Officials Set to Speak: Potential Market Mover

Investors are closely watching a lineup of Federal Reserve speakers on Monday, including Christopher Waller, Beth Hammack, Alberto Musalem, John Williams, and Raphael Bostic. Any hawkish tone could lift the U.S. Dollar (USD) and potentially slow gold’s rally, as gold is priced in dollars.

Inflation Data Reinforces Rate Cut Expectations

Fresh data from the U.S. Bureau of Economic Analysis showed the Personal Consumption Expenditures (PCE) Price Index rose 2.7% year-on-year in August, matching forecasts. Core PCE, which excludes food and energy, increased 2.9% over the same period. On a monthly basis, the PCE rose 0.3% and core PCE advanced 0.2%.

According to independent metals trader Tai Wong, “Nothing from this data will prevent the Fed from carrying on with another cautious rate cut at the October meeting.” Markets now price in an 88% chance of a rate cut in October and a 65% probability of another cut in December, according to CME FedWatch Tool data.

Technical Outlook: Gold Bullish but Overbought Signals Emerge

Gold remains firmly above the 100-day Exponential Moving Average (EMA), confirming its long-term bullish trend. However, the 14-day Relative Strength Index (RSI) sits near 75.9, indicating overbought conditions. This could lead to short-term consolidation or a mild pullback before the next leg higher.

The immediate resistance zone for XAU/USD stands at $3,800–$3,810 — a psychological barrier and the upper edge of the Bollinger Band. A decisive break above this level could open the door to $3,850 in the near term.

Gold Maintains Momentum Amid Political and Economic Uncertainty

With government shutdown fears, steady inflation figures, and looming Fed decisions, gold remains in a sweet spot for investors seeking safety and diversification. While the technical picture suggests some near-term caution, the broader outlook continues to favor the precious metal.