Gold Price Prediction: $3,800 or $4,980? Fed Rate Cut and Trade Hopes Split Markets
Gold prices fell to a three-week low on Tuesday as easing U.S.–China trade tensions reduced demand for safe-haven assets.
Quick overview
- Gold prices fell to a three-week low due to easing U.S.–China trade tensions, reducing demand for safe-haven assets.
- Investor focus is on the Federal Reserve's upcoming policy meeting, with a 25-basis-point rate cut expected.
- Despite the recent dip, gold is up over 51% in 2025, driven by geopolitical instability and lower real yields.
- Technical analysis shows gold is consolidating near $3,958, with a potential breakout above $3,981 signaling a bullish reversal.
Gold prices fell to a three-week low on Tuesday as easing U.S.–China trade tensions reduced demand for safe-haven assets. Investor focus has shifted to the Federal Reserve’s policy meeting, where a 25-basis-point rate cut is widely expected.
Despite this short-term dip, gold remains up more than 51% in 2025, supported by months of geopolitical instability and lower real yields. “The U.S.–China trade tensions have really diminished, with a possible deal later this week between Presidents Xi and Trump. That’s bearish for safe-haven metals,” said Jim Wyckoff, senior analyst at Kitco Metals.
Markets Await Fed and Trade Summit Clarity
Officials from both nations have reportedly finalized the framework of a potential trade agreement. It’s supposed to be reviewed at Thursday’s summit in South Korea. The prospect of a deal has driven Wall Street indices to record highs, signaling renewed risk appetite.
Traders are also closely watching the Federal Reserve’s two-day meeting, which could offer fresh guidance on rate policy heading into year-end. Lower interest rates typically support non-yielding assets like gold, but optimism across equities and commodities has temporarily capped bullion’s appeal.
Forecasts remain divided. The London Bullion Market Association expects gold to reach $4,980 per ounce in the next 12 months, while Citi and Capital Economics have trimmed their outlooks. Bank of America remains cautious, warning of a potential retreat to $3,800 if risk appetite strengthens further.
Gold Technical Outlook: Trendline Break in Focus
Technically, gold (XAU/USD) is trading near $3,958, consolidating after rebounding from $3,886. The short-term chart shows a descending trendline from the $4,252 high acting as resistance.
Spinning tops and Doji candles around the 20-EMA highlight market indecision, while RSI has turned up from 30, hinting at fading bearish pressure. A close above $3,981 could confirm a short-term reversal, targeting $4,058 and $4,160.
However, if gold fails to clear this barrier, a drop back toward $3,886 or $3,795 remains likely. A confirmed breakout above the trendline could signal the first higher high since mid-October — potentially setting the stage for a bullish rebound in November.
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