Gold Price Forecast: XAU/USD Nears $4,500 as Rate-Cut Bets and Risk Flows Fuel Rally
Gold hit a new record early in European trading hours, almost reaching $4,497, as investors sought safe havens amid an increasingly...
Quick overview
- Gold reached a new record of nearly $4,497 as investors seek safe havens amid global uncertainty.
- Expectations of future Fed interest rate cuts are making gold more attractive as lower rates reduce the cost of holding it.
- Key upcoming US economic data could influence gold prices, with potential for further increases if the data disappoints.
- Technical indicators suggest a strong upward trend for gold, with support levels identified at $4,453 and resistance at $4,500 - $4,530.
Gold hit a new record early in European trading hours, almost reaching $4,497, as investors sought safe havens amid an increasingly uncertain world. The ongoing disruption to energy supplies and trade routes has really underscored gold’s role as a safe bet over a short-term speculative gamble. Even when those issues stay contained, they tend to make the whole market feel more uneasy and that’s where gold has been doing its job.
The reason gold’s doing so well is simple. When the outlook on the global economy and politics gets cloudy, investors tend to flock to assets with low credit risk and a long history of being a safe store of value – and gold is right at the centre of that conversation.
Fed Policy Expectations Give Gold a Hand
Expectations of what the Fed will do are also helping gold’s price. Futures traders say the Fed will cut US interest rates in 2026 as inflation cools and the labour market slows a bit. Lower rates mean that holding gold, which doesn’t pay any interest, doesn’t cost as much, making it more attractive. And when real interest rates – which take into account inflation – are softer, gold looks even better.
Although the chances of an interest rate cut in the near future are pretty slim, recent comments from the Fed suggest they’ll be cautious and wait for the numbers to come out before making any moves. That’s taken some pressure off the dollar and has kept investors buying precious metals in big numbers.
US Economic Data in Focus
We’re now looking forward to some key US economic data – GDP revisions, durable goods orders, and employment numbers – all of which are expected to show a bit of slowdown compared to the past few quarters. Manufacturing is still all over the place.
- If the data comes out worse than expected, it could push the dollar even lower and help gold rise
- If it comes out stronger, it might trigger a bit of consolidation for gold before it makes any new moves
Investors are currently prioritising playing it safe over taking risks.
What Gold’s Technicals Are Telling Us
Looking at the 4-hour chart, gold is trading just above $4,485 after a fairly smooth continuation move within a clear trend channel. It’s broken through the 0.236 Fibonacci level near $4,453 with some pretty strong-looking candles and shallow pullbacks, suggesting that the buyers are in charge right now.
The 50-EMA at $4,341 and the 100-EMA near $4,283 are both sloping upward, indicating the trend remains strong. The RSI is above 70, so momentum is pretty good, though there’s always the chance of short-term consolidation.
- Support: $4,453, then $4,425, and $4,380
- Resistance: $4,500 – $4,530
Trade idea: Buy a pullback near $4,455 and target $4,530, but stop if gold falls below $4,425.
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