Gold Holds Above $4,000 as Fed Cut Bets and Ceasefire Lift Market Mood
Gold (XAU/USD) held firm above $4,000 on Thursday, consolidating near record levels reached earlier in the week as traders balanced...
Quick overview
- Gold (XAU/USD) remains above $4,000, supported by expectations of Federal Reserve rate cuts and easing geopolitical tensions.
- The yellow metal has surged 54% year-to-date, driven by central bank buying, ETF inflows, and a weaker U.S. dollar.
- Analysts maintain a bullish outlook for gold despite recent profit-taking, citing ongoing geopolitical risks and political turmoil in various countries.
- Technically, gold's chart suggests further upside potential, with key support levels identified and a strong momentum indicated by the RSI.
Gold (XAU/USD) held firm above $4,000 on Thursday, consolidating near record levels reached earlier in the week as traders balanced expectations of further Federal Reserve rate cuts against signs of easing geopolitical tensions. The yellow metal, up 54% year-to-date, remains one of the strongest-performing major assets of 2025, driven by robust central bank buying, renewed ETF inflows, and a weaker U.S. dollar.
According to the Federal Reserve’s September meeting minutes, officials agreed that slowing job growth warranted more policy support, though inflation risks remained. Markets now price in a 94% probability of a 25-basis-point rate cut in October and 79% odds of another in December, according to CME FedWatch. Lower rates tend to boost gold by reducing the opportunity cost of holding the non-yielding asset.
Adding to the optimism, Israel and Hamas reached the first phase of a U.S.-brokered ceasefire and hostage exchange deal, part of President Donald Trump’s broader Gaza peace initiative. The agreement briefly cooled one of the world’s most volatile geopolitical flashpoints, helping gold stabilize after touching a fresh record.
Analysts See Support Despite Profit-Taking
While some traders locked in profits after gold’s record run, analysts see the broader structure as fundamentally bullish.
“You can’t ignore the impact of the Israel-Hamas ceasefire. Geopolitical risks helped gold rally, but profit-taking after a new record is natural,” said Kyle Rodda, senior analyst at Capital.com.
“We still view the trend as constructive since all the fundamentals remain in gold’s favor,” he added.
Beyond geopolitics, political turmoil in Japan and France and an ongoing U.S. government shutdown have also amplified demand for safe-haven assets. With global markets under pressure, investors continue to favor gold as both a hedge against volatility and a store of value in an uncertain macro landscape.
Gold Technical Setup Suggests More Upside
Technically, gold’s chart paints a strongly bullish picture. Prices are consolidating near $4,038, within a rising channel marked by higher lows since late September. Support lies near $3,938–$3,910, where the 50-SMA and Fibonacci retracement levels converge—an area likely to attract dip buyers.
- Buy Zone: $3,938–$4,000
- Target 1: $4,093
- Target 2: $4,127
- Stop-Loss: Below $3,910
The RSI at 69.5 shows strong momentum but hints at a potential pause before another leg higher. A break above $4,057 could open the path to $4,093 and $4,127, while a drop below $3,910 would signal fading strength.
For now, gold’s rally looks sustainable, supported by dovish monetary policy expectations, steady investor demand, and resilient technical structure. As long as it stays above its channel base, buying the dips remains the preferred strategy.
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