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Gold prices are glimmering at record highs, and analysts are debating whether the rally still has room to run. With global uncertainty rising and Washington once again paralyzed by a budget standoff  the yellow metal is asserting its reputation as a safe-haven asset like few others.

A Surge Fuelled by Policy Shifts and Fiscal Fear
Gold has climbed relentlessly through 2025, driven by falling real interest rates, sticky inflation, a weakening U.S. dollar and renewed geopolitical tensions.

"When real rates fall and inflation expectations stay high, gold becomes an attractive alternative to bonds or cash." Goldman Sachs analysis.

J.P. Morgan expects gold to average $3,675 per ounce by late 2025 with a potential climb to $4,000 by mid-2026. HSBC went further this week, suggesting prices could trade above $4,000 in the near term, citing “sustained central bank buying and mounting fiscal and geopolitical risks.”

Even Citi analysts likened the market's behaviour to fine art — “an asset class increasingly driven by scarcity and sentiment rather than fundamentals.”

Washington Gridlock Adds Fuel to the Fire
The latest spark in gold’s rally comes not from Beijing or Brussels, but from Capitol Hill. Congress has failed to pass a federal budget, raising the spector of another government shutdown and rattling investors already on edge.

Fiscal paralysis in Washington often drives demand for safe-haven assets. A prolonged funding impasse undermines confidence in U.S. governance and highlights concerns about the nation’s swelling debt load.

“Every time Congress stumbles over the budget, investors are reminded that gold doesn’t depend on political promises,” FX Empire strategist.

The standoff also revives worries about the U.S. dollar’s long-term credibility. After Fitch downgraded U.S. debt in 2023, repeated fiscal showdowns have eroded confidence in America’s creditworthiness. A softer dollar and declining Treasury yields further reinforce gold’s momentum.

Markets are now pricing in potential spending delays, credit-rating pressure, and slower government payments all of which strengthen the case for holding real assets over paper promises.

Why the Rally May Continue
Beyond Washington, the fundamentals for gold remain strong. Central banks across Asia and the Middle East are accumulating reserves, while institutional investors hedge against persistent inflation.

Expectations of rate cuts by the U.S. Federal Reserve and other major central banks add further lift to non-yielding assets like gold. The U.S. dollar’s weakness has only intensified the trend.

After breaking through key resistance levels near $3,800 per ounce, technical analysts see momentum building for another move higher.

Still, caution lingers beneath the optimism. A rebound in the dollar, stronger-than-expected economic data, or renewed hawkishness from central banks could stall the rally.

“If inflation cools faster than anticipated or if rate cuts are delayed, gold could easily give back some of its recent gains,” FX Empire commodities analyst.

Profit-taking after such a steep climb is also likely, with traders warning of short-term corrections even within an overall bullish trend.

The Bottom Line
Gold’s enduring allure lies in its ability to thrive amid monetary easing, fiscal instability, and political dysfunction. As uncertainty deepens from the U.S. budget impasse to global economic slowdown the metal’s safe-haven status appears as strong as ever.

For now, the path of least resistance remains upward. But as history shows, even gold’s brightest rallies can lose their shine when confidence returns and policymakers regain control.

At a Glance: Gold in 2025

Current price: $3,750-$3,800 per ounce

HSBC forecast: $4,000+ near-term

J.P. Morgan forecast: $3,675 average Q4 2025

Key drivers
Fed rate cuts, 
U.S. budget gridlock
central bank buying
dollar weakness

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