This morning at the opening session, Gold continued its upward momentum and set a new peak at $3,875/ounce.
The reason for this surge comes from the fact that the US government will almost certainly have to shut down starting from 11:00 a.m. on October 1st Vietnam time, as the Senate failed to pass the Republican party’s budget plan.
In addition, Donald Trump also threatened that if the budget plan is not approved, he will continue to lay off a large number of federal employees, which will further disrupt the already fragile US labor market.
Furthermore, the US stock market may also have to close if the government shuts down, and the entire global financial market will be heavily affected.
Therefore, if the US government does not quickly come up with a solution, many activities will be delayed, including the release of the Nonfarm Payroll data at the end of this week. The US dollar will face strong negative pressure, while Gold in the short term will be strongly supported to rise, and it is entirely possible for Gold to reach $3,900 – $4,000/ounce in October.
Technical analysis:
In the short term, Gold is accelerating and shows no signs of stopping its upward momentum.
However, there is a possibility that Gold will see a correction around the current peak of 387x, down to the Fibonacci 0.5 – 0.618 levels at $3,825 – $3,835 before continuing its strong rally.
In the case that Gold does not correct and continues to set new highs, it could potentially surge to the 392x$/ounce region within this week.
Trí Hùng
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