Gold Closes In on $4,000 as Investors Weigh US Shutdown, France

Core Insights - Gold prices have surged significantly, with bullion rising past $3,977 an ounce, driven by political instability and economic uncertainty [2][3][5] - The US government shutdown has deprived investors of crucial economic data, contributing to the bullish sentiment towards gold [3][5] - Central banks, particularly the People's Bank of China, have been active buyers of gold, extending their purchasing streak for 11 consecutive months [7] Economic Factors - The stronger US dollar has impacted gold prices, making it more expensive for international buyers [2][4] - The Federal Reserve's anticipated interest rate cut is expected to further benefit gold, as it does not yield interest [3][6] - Political upheaval in France and Japan has raised fiscal concerns, bolstering the dollar against other currencies and contributing to gold's rally [4][5] Market Sentiment - There is a growing perception among investors that gold is becoming a safer asset compared to the dollar, indicating a shift in market sentiment [6] - Goldman Sachs has raised its gold price forecast for December 2026 to $4,900 an ounce, reflecting optimism driven by ETF inflows and central bank purchases [7] - Investment strategies are suggesting an overweight allocation in gold as a hedge against the US dollar, with recommendations for portfolio allocations to increase to around 5% [8]