(MENAFN- Your Mind Media ) Spot gold surpassed the $3,970 per ounce mark for the first time, setting a new all-time high amid a backdrop of growing political and economic instability worldwide. Investors sought refuge in the precious metal as political tensions in Japan and France combined with the partial U.S. government shutdown, fueling fears about the impact on the wor’d’s largest economy.

In Japan, uncertainty increased following the selection of Sanae Takaichi as a potential prime minister, a move that reshapes the country’s political landscape. Meanwhile, in France, the crisis deepened with the resignation of the recently appointed prime minister, weakening the governme’t’s position and heightening political risk across the eurozone. This climate of volatility has strengthened ’old’s appeal as a safe-haven asset amid financial market instability.

In the United States, the federal government shutdown entered its sixth day with no signs of an agreement between Democrats and Republicans. The paralysis of official agencies has halted the release of key macroeconomic data, adding to uncertainty about the c’untry’s economic direction. At the same time, private reports revealed a slowdown in private-sector employment and weakness in services, feeding fears of a deeper economic cooling.

Throughout the week, gold consolidated around the $3,900 level, supported by dollar weakness and political anxiety. Investors remain focused on the outcome of the government shutdown and statements from the Federal Reserve (Fed), as the delay in economic indicators could influence the direction of monetary policy. In an environment of limited visibility and fiscal tensions, the metal has reinforced its position as one of the most resilient assets in the market.

Gold’s role as a safe haven has been reaffirmed amid political uncertainty, fiscal concerns, and signs of a global slowdown. However, the future of its trend will largely depend on how quickly the U.S. government shutdown is resolved and on the stance the Fed adopts regarding interest rates. A more flexible policy could further strengthen the precious metal, while a more restrictive tone might limit its advance.

Bank of America (BofA) warned, however, that the recent rally may be approaching a point of technical exhaustion. Although gold has risen for seven consecutive weeks and stands at historically high levels, technical indicators show signs of overbought conditions. Prices remain well above their 200-day and 200-week moving averages, while relative strength indexes (RSI) are beginning to show bearish divergences.

Despite these warnings, BofA believes the magnitude of the current surge is more moderate than those seen in the 1970s and 2000s, suggesting there could still be room for further long-term gains. Nonetheless, the bank advises caution given the potential for a correction around $4,000 before gold resumes its trend toward a potential target of $5,000 per ounce.

In conclusion, gold has emerged as the major beneficiary of a world mired in political and economic tensions. Although technical indicators point to a possible pause in its climb, the global context continues to support strong demand for the safe-haven metal. Should the U.S. government shutdown persist and international uncertainty linger, gold may continue to shine as a symbol of stability in times of crisis."

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