DBG Markets: Market Report for Oct 01, 2025

Markets on Edge as Shutdown Deadline Nears; Gold Extends Rally

U.S. Government Shutdown Front & Center

The U.S. is on the brink of a partial government shutdown after the Senate failed to pass a stopgap funding bill, with the deadline set for midnight. Federal agencies are preparing contingency plans, with tens of thousands of workers facing furloughs if no deal is reached.

Some operations, like tariff collection by CBP, are expected to continue, but the bigger risk lies in potential delays to critical economic data — including Friday‘s Non-Farm Payrolls (NFP) report — which could complicate the Fed’s policy assessment.

While history shows shutdowns tend to cause limited long-term damage, they often trigger short-term volatility in sentiment and liquidity, weighing on the dollar and equities while boosting safe-haven flows into gold and Treasuries.

Gold: Slipped Sharply, Then Recovered

Gold extended its record-breaking rally on Monday, closing at $3,858.84/oz after a sharp intraday sell-off pushed prices as low as $3,793. In Asian trade today, the metal pushed to fresh highs once again, reflecting ongoing demand for safe-haven assets amid rising political uncertainty.

Safe-haven demand has surged as traders unwind long-dollar positions. Momentum is building, with $3,900 now emerging as the next psychological target.

XAU/USD, H4 Chart

Still, overbought conditions remain a risk. Yesterdays sharp reversal showed selling pressure may intensify in the near term. Key resistance now sits in the $3,870–$3,875 zone, while immediate support is found at $3,830–$3,840.

XAU/USD, M30 Chart

Failure to hold above $3,830 could shift gold into a consolidation phase, with the $3,800–$3,875 range likely acting as the near-term battleground.

Dollar, Rates & Fed Speculation

The looming shutdown has injected uncertainty into dollar trading, as a prolonged funding lapse could disrupt economic data flow and weaken the Feds visibility on inflation and employment.

Today, market focus turns to the ADP Employment Change report — seen as a possible substitute if Fridays NFP is delayed. Weak job growth would strengthen the case for more rate cuts, reviving dovish bets and weighing further on the dollar.

USD Index, H4 Chart

The U.S. Dollar Index continues to hover near the 97.50 support level, reflecting indecision. A break below this level could expose DXY to renewed selling pressure, with 96.00 as the next major support. Conversely, stronger labor data could help the dollar stabilize back toward the 98.50 resistance band.

Crosses & FX Pairs to Watch

· USD/JPY remains subdued, reflecting both BoJ policy divergence and dollar dynamics. The pair is still trapped in its well-established 149–146 range as we covered on Mondays commentary.

· EUR/USD and GBP/USD also remain vulnerable to dollar swings as traders weigh shutdown risk against broader Fed expectations, yet, sideways is expected to extend ahead of key event.

EUR/USD, H4 Chart

For EURUSD, the pair has regained ground above the 1.1700 level but remains confined within a consolidation range. Unless there is a clear breakout above 1.1730, downside risks persist. A sustained move above the 1.1730–1.1800 zone would signal renewed bullish momentum and open the door for further upside in EURUSD.

Bottom Line

Markets enter today balancing shutdown risk, labor data, and policy signals. Gold remains the standout beneficiary, while the dollar stays vulnerable near key support. Expect heightened volatility, especially if ADP jobs data disappoints or shutdown headlines worsen.