Friday’s reversal wasn’t purely technical. A firmer U.S. dollar and shifting geopolitical signals weighed on sentiment. The U.S. Dollar Index edged up 0.1%, applying pressure to dollar-denominated gold by making it more expensive for international buyers. Meanwhile, U.S. gold futures for December delivery settled 2.1% lower at $4213.30.

Gold had been on track for its biggest weekly gain since September 2008, fueled by safe-haven demand. But market tone shifted after former President Donald Trump walked back comments about full-scale tariffs on China, confirming plans for a meeting with his Chinese counterpart. “Trump’s more conciliatory tone… has taken a little heat out of the precious trade,” said independent metals trader Tai Wong.

Rate Cut Bets, ETF Demand Still Support Bullish Case

Despite Friday’s selloff, broader market fundamentals remain supportive over the longer term. Gold is still up over 64% year-to-date, driven by central bank purchases, strong ETF inflows, a weakening dollar, and persistent geopolitical risk. Markets are pricing in a 25 basis point Fed cut in both October and December — a clear tailwind for non-yielding assets like gold.

On the physical side, demand in Asia remains resilient, with Indian premiums hitting decade highs ahead of festival season. That demand base could offer price support even in a near-term pullback.

Gold Price Forecast: Short-Term Bearish, Long-Term Bullish

In the short term, gold looks vulnerable to a technical correction. The confirmation of Friday’s reversal top could trigger a test of $4162.71 and potentially $3944.43. A decisive break below the latter would shift focus toward the 50-day moving average at $3675.27.

Until bulls reclaim control above $4380.99, the near-term bias is bearish. However, rate cut expectations and strong structural demand continue to underpin a bullish long-term outlook.