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Gold Price Forecast: XAU/USD could see a profit-taking pullback ahead of US PMIs, Powell

  • Gold retreats after hitting lifetime highs above $3,750 early Tuesday.
  • US Dollar consolidates the downside ahead of Fed Chair Powell’s appearance.
  • Gold’s record rally remains unabated but overbought RSI conditions on the daily chart could caution buyers.

Gold is taking a breather early Tuesday after having extended the previous upsurge to renew record highs above the $3,750 psychological level.

Gold: All eyes on Powell and geopolitics

Gold traders look to take profits off the table after a two-day relentless record rally, repositioning ahead of the top-tier S&P Global preliminary US Manufacturing and Services PMI data and the eagerly awaited speech from US Federal Reserve (Fed) Chairman Jerome Powell.

Powell is due to speak about the economic outlook at the Greater Providence Chamber of Commerce Economic Outlook Luncheon, in Rhode Island, on Tuesday.

The US business growth data and Powell’s words will be closely scrutinized for fresh hints on whether the Fed will deliver two more interest rate cuts in the remainder of this year.

This comes after the hawkish remarks from Fed officials delivered on Monday and last week’s cautious rate cut decision announced by the US central bank.

New Fed Governor Stephen Miran said on Monday that the Fed is misreading how tight it has set monetary policy and will put the job market at risk without aggressive rate cuts.

Meanwhile, Fed policymakers Raphael Bostic, Beth Hammack and Thomas Barkin maintained their cautious rhetoric on further easing amid looming upside risks to inflation.

Besides, growing expectations of further Fed rate cuts, intensifying geopolitical tensions surrounding the Russia-Ukraine conflict and rising concerns over the US fiscal debt emerge as the key factors powering Gold’s record run.

Russian military jets flew over Estonia for 12 minutes on Friday. Although Moscow denied it, US President Donald Trump has said America would come to the defence of Poland and the Baltic states if Russia were to attack.

Interestingly, in the past fortnight, Russian drones and fighter jets have entered Estonian, Polish and Romanian airspace as the Kremlin’s war on Ukraine continues.

Looking ahead, the US preliminary Manufacturing PMI is seen falling to 52 in September from 53 in August, while the Services PMI is expected to decline to 53.9 in the same period versus 54.5 previous.

Disappointing PMI readings could revive US economic concerns and ramp up the odds of further easing by the Fed, boding well for the non-interest-bearing Gold and vice-versa.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) remains within the overbought territory, currently descending to 76.

If the pullback picks up steam, the initial support is seen at the $3,700 threshold, below which the previous day’s low of $3,684 will offer some comfort.

Further down, the $3,650 psychological barrier could come to the rescue of buyers.

Conversely, buyers need acceptance above the $3,750 region to extend the record rally toward the $3,800 round level.

Economic Indicator

S&P Global Manufacturing PMI

The S&P Global Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity in the manufacturing sector is generally declining, which is seen as bearish for USD.

Read more.

Next release: Tue Sep 23, 2025 13:45 (Prel)

Frequency: Monthly

Consensus: 52

Previous: 53

Source: S&P Global

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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