Gold Price Forecast: XAU/USD holds on to record gains just below $4,200

XAU/USD Current price: $4,187.73

• United States political and trade turmoil fuels demand for the safe-haven metal.
• Federal Reserve officials delivered no new messages ahead of the October meeting.
• XAU/USD is showing signs of near-term upward exhaustion, buyers not done yet.

Spot Gold briefly surpassed the $4,200 mark on Wednesday, hitting yet another all-time high. The XAU/USD pair topped at $4,218.22 early in the European session, now changing hands at around $4,190.00. The demand for safety continues amid the United States (US) government shutdown, which is entering its third week. The US Senate was unable to pass a temporary funding bill on Tuesday, and despite ongoing talks, there are no signs of progress towards an agreement.

Other than that, concerns about escalating trade tensions between the US and China receded somewhat, putting modest pressure on the US Dollar (USD). In turn, Gold keeps piling gains.

Meanwhile, the absence of relevant US data leaves the focus on Federal Reserve (Fed) officials’ words two weeks ahead of the October monetary policy meeting. So far, Fed Governor Stephen Miran noted that the economy is more vulnerable to shocks because policy is restrictive, and urged “to get to a more neutral policy.” Miran added that the only difference between his view and the rest of the Federal Open Market Committee (FOMC) members is on the speed of the trip to neutral.

Miran later added that the current Fed’s policy is more restrictive than what people think, because the neutral rate has fallen. Also, Fed Governor Christopher Waller noted that layoffs and lower hiring due to AI is expected to increase, foreseeing a weaker labor market ahead.

XAU/USD short-term technical outlook

From a technical point of view, the XAU/USD is overbought, yet without signs of upward exhaustion. Technical indicators in the daily chart keep heading north despite being at extreme levels, in line with the dominant bullish trend. At the same time, the current price stands far above all bullish moving averages, which have lost their relevance as potential supports but still reflect buyers’ strength.

The near-term picture, however, is giving the first signs of upward exhaustion. On the 4-hour chart, the Momentum indicator shows some bearish divergences. In the 4-hour chart, the Momentum indicator posted a lower high despite higher highs in XAU/USD, and currently heads south within positive levels. At the same time, the Relative Strength Index (RSI) indicator is marginally lower at around 67, still above the weekly bottom. Meanwhile, moving averages are still heading north below the current level, with the 20 Simple Moving Average (SMA) currently hovering around $4,120.

Support levels: 4,164.00 4,152.80 4,139.80

Resistance levels: 4,204.10 4,218.30 4,230.00