• Gold active futures reached a new high, hitting $4000 (~ Rs 120,900), as financial markets became increasingly unsettled due to the US government shutdown and a French political crisis. The political upheavals in Japan and France are escalating fiscal worries and fueling the gold rally.
• After unsuccessful attempts to come to an agreement with political parties about budget spending, which prevented efforts to control the biggest fiscal deficit in the euro area, Sebastien Lecornu resigned as the prime minister of France. The financial markets have also been shaken by Sanae Takaichi’s almost certain promotion to the position of prime minister of Japan.
• This week, the US government shutdown continued, and the White House threatened to lay off a large number of federal employees. Additionally, this has prevented investors from accessing crucial information required to evaluate the state of the US economy, which further muddies the Fed’s decision-making process. The Fed’s latest interest rate cut and the expectation of more have helped, and central banks and gold-backed exchange-traded funds have been eager buyers.

Technical Triggers 

• Gold has achieved the target of $4000 (~Rs 120,900) today. This rally can show more upward spikes, but one needs to be very cautious at this level. We can also see sharp sell-offs, as the psychological target is achieved. If Gold falls below $3850 (~Rs 117,000), we can say, top has been made, and a correction will follow.

Support and Resistance