Gold maintains momentum as Fed cut expectations and rising global tensions offset Dollar gains

Gold (XAUUSD) trades near record highs as macro risks keep safe-haven demand intact. A stronger U.S. Dollar, supported by firm equity markets, has created short-term pressure, but deeper uncertainties outweigh the rebound. A prolonged U.S. government shutdown, dovish Fed expectations, and unresolved U.S.–China trade tensions continue to drive global caution. At the same time, rising geopolitical risks and an upcoming U.S. inflation report are intensifying market uncertainty. These combined pressures keep gold well-positioned, with safe-haven demand supporting its long-term upward trajectory.

Gold holds near highs as Fed cuts, geopolitical tensions, and trade risks fuel safe-haven demand

Gold holds firm near its peak despite a brief pullback driven by a stronger U.S. Dollar. Equity market strength has lifted the Dollar, but broader macro risks could limit the rebound. A prolonged U.S. government shutdown, dovish Fed signals, and unresolved trade tensions remain key drivers of uncertainty. These factors continue to support safe-haven flows into gold.

Meanwhile, unresolved trade tensions between the U.S. and China are impacting global risk positioning. President Trump’s recent remarks suggest a willingness to ease tensions, though he also warned that failure to reach a deal could result in up to 155% tariffs. This uncertainty keeps global markets on edge. At the same time, the CME FedWatch Tool shows that markets have priced in two rate cuts, one in October and another in December. This outlook puts pressure on the Dollar and strengthens the case for non-yielding gold.

Furthermore, rising geopolitical tensions continue to support gold’s safe-haven demand. With Russia pushing for more territory and Ukraine refusing concessions, the war shows no sign of ending soon. This ongoing tension continues to support gold’s safe-haven appeal. Additionally, investors are focused on Friday’s U.S. inflation report. Any surprise in the CPI could shift expectations for Fed policy, adding volatility to both the Dollar and gold. In the meantime, gold remains well-supported, and pullbacks may present fresh buying opportunities.

Gold cup-and-handle breakout confirms structural bull market toward $5,200

The gold chart below shows a well-defined cup-and-handle formation that has developed over the past decade. Specifically, the “cup” began forming after gold peaked in 2011. Prices declined in 2015, then gradually recovered over the following years. This price action created a broad, rounded base that spanned almost a decade, setting the stage for a larger bullish structure.

Between 2020 and 2024, gold formed the “handle” portion of the pattern. During this period, price moved within a tightening range, repeatedly testing the trendline and remaining beneath key resistance. Consistent support along the triangle’s lower boundary signaled sustained buying interest. Eventually, a decisive breakout occurred in late 2024, as gold cleared both the triangle’s resistance and the rim of the cup formation.

Following the breakout, gold surged with strong momentum, confirming the completion of the handle phase. The move triggered a sharp advance, initiating the expected continuation pattern. The projected path points toward the $4,800 to $5,200 range in the coming years, supported by strong breakout momentum. Historically, long-term cup-and-handle formations have preceded major bull markets. This setup also aligns with broader macro drivers, including weakening currency values, heightened geopolitical risks, and sustained demand for safe-haven assets like gold.

Gold outlook: Breakout patterns and macro risks support long-term bullish trajectory

Gold remains firmly supported by a powerful combination of technical strength and macroeconomic drivers. The breakout from a decade-long cup-and-handle formation confirms long-term bullish momentum, with the projected path pointing toward the $5,200 level. Safe-haven demand remains strong as global tensions, dovish Fed signals, and trade risks outweigh Dollar strength. As inflation data approaches and global risks intensify, gold appears well-positioned to extend its rally.

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