Gold Price Forecast: The hunt for $4,000/oz
- Gold prices clinched an all-time high past $3,830/oz.
- The US Dollar lost further ground on shutdown jitters and rate cut bets.
- Markets’ attention now shifts to the US labour market and the release of NFP.
Gold extended its winning streak on Monday, rising for a third straight session and setting a fresh all-time high above $3,830 per troy ounce. On a weekly basis, the metal is now on track for a seventh consecutive gain, having only slipped once this year: a marginal pullback in July.
The latest leg higher was fuelled by a softer US Dollar (USD) and a drop in US Treasury yields across various maturities, as markets grapple with the risk of an imminent government shutdown.
Momentum has also been underpinned by growing bets that the Federal Reserve (Fed) will deliver additional interest rate cuts, not just before year-end but well into 2026.
On this, implied rates currently suggest a little over 41 basis points of easing by December, rising to roughly 103 basis points by the end of 2026.
Beyond Fed expectations, sustained demand from central banks and exchange-traded funds (ETFs), heightened geopolitical tensions, and uncertainty over Washington’s tariff policy, even if recently quieter, are adding to Gold’s rally.
Looking ahead, traders will keep a close eye on leading US business activity data due later this week, capped by the all-important September labour market report on Friday.
Gold’s short-term technical outlook
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Further advances may see the record top of $3,833 (September 29) revisited, prior to Fibonacci extensions of the 2024-2025 rise at $3,912 and $4,437.
If sellers take control, there is provisional contention at the 55-day and 100-day SMAs at $3,473 and $3,406, respectively. Down from here emerges the July valley of $3,268 (July 30).
Momentum indicators are optimistic: The Relative Strength Index (RSI) remains well in the overbought region past 79, and the Average Directional Index (ADX) of nearly 50 indicates a very strong trend.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
