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Gold (XAU/USD) Pushes Toward $3,791 as Fed Bets and Weak Imports Drive Divergence

Gold prices continued their advance this week with spot bullion settling at $3,778.62 per ounce, up nearly 0.8% on Friday and closing just shy of the record intraday high of $3,791.26 earlier in the week. December gold futures also climbed 1% to $3,809, extending weekly gains of 2.1%. The strength came as the U.S. PCE index rose 2.7% year-over-year in August, in line with expectations, cementing investor conviction that the Federal Reserve will proceed with at least one rate cut before year-end. The CME FedWatch tool now implies an 88% probability of a cut in October and 65% odds of a second in December, keeping bullion well bid against a backdrop of steady inflation and moderate income growth.

Fed Outlook and Treasury Yields Underpin Gold’s Strength

The latest macro data left the Fed with optionality but not urgency. Core PCE increased 0.2% month-on-month and 2.9% annually, providing enough justification for easing while confirming inflation’s stickiness above target. Bond markets stayed muted, with the 10-year Treasury yield at 4.16% and the 30-year at 4.74%, showing that fixed income investors are awaiting labor market confirmation. As long as yields remain capped and rate cuts stay in play, the environment remains supportive for gold, allowing XAU/USD to defend elevated levels near $3,770 despite a stronger U.S. dollar earlier in the week.

China’s Waning Physical Demand Signals Strain at Record Prices

While ETF inflows remain strong, physical buying has weakened. China’s gold imports dropped 34% in August compared to the prior month, while Hong Kong’s net imports collapsed 39% to just 27 tons. Dealers in Shanghai and Hong Kong are now offering discounts ranging from $21 to $36 per ounce, the steepest since May 2020, as local buyers balk at near-$3,800 pricing. This softening in Asian demand is creating a stark divergence between Western financial flows into ETFs and real-world jewelry and retail consumption in Asia, historically the backbone of the gold market. If prices remain pinned near all-time highs, the risk of further erosion in physical demand looms.

Technical Landscape: Bulls Eye Breakout, Bears Watch $3,730

On the technical front, gold remains trapped in a narrow band between support and record resistance. Spot XAU/USD has tested $3,791.26 multiple times without a confirmed breakout. A sustained push above that level opens the door toward $3,879.64, the next Fibonacci extension, and potentially $3,915. Conversely, immediate downside support sits at $3,730, with a deeper safety net near $3,712 tied to the 50% retracement of the September leg higher. A close below $3,712 risks a correction toward $3,693, unwinding nearly two weeks of bullish momentum. The RSI at 57 signals neutral positioning, while candlestick rejection at highs indicates fading conviction from momentum traders.

Macro Growth Trends and ETF Flows Reinforce Strategic Appeal

Despite softness in Asia, Western demand remains resilient. Global ETFs linked to gold continue to see inflows, positioning bullion as both a hedge against dollar volatility and a store of value amid tariff uncertainty. Revised U.S. GDP growth at 3.8% annualized in Q2 and the Atlanta Fed’s Q3 tracker at 3.9% show that economic expansion is holding, complicating the Fed’s rate path. Still, investors have poured into gold as a counterweight to equities trading at stretched 22.5x forward earnings, above both the five- and ten-year averages. With central banks maintaining net purchases and M2 money supply growth re-accelerating to 6% globally, gold retains structural support from liquidity-driven flows.

Verdict: XAU/USD Short-Term Neutral, Long-Term Bullish

The immediate battle sits between $3,730 and $3,791. Holding above $3,730 keeps gold in a consolidation phase with breakout potential, while a decisive push through $3,791 sets up acceleration to $3,879 and beyond. The physical demand drop in China is a near-term drag, but institutional ETF inflows and dovish Fed expectations outweigh retail softness. For now, XAU/USD is a Hold in the short-term range, but with structural liquidity, Fed easing, and central bank buying as backstops, the long-term outlook remains bullish, targeting $3,900+ into 2026.

That’s TradingNEWS

The EURJPY pair failed to resume the bullish attack, due to its stability below %1.809 Fibonacci extension level, forming an extra barrier at 175.20, providing sideways trading since yesterday by its stability near 174.85.

Reminding you that the bullish scenario will remain valid, due to the stability within the bullish channel’s levels besides the continuation of forming an initial support at 173.40 level, which makes us wait for breaching the current barrier to ease the mission of recording extra gains that might begin at 176.00 and 176.95.

The expected trading range for today is between 174.20 and 175.20

Trend forecast: Sideways until achieving the breach

Gold (XAU/USD) Hits Historic Highs as Tariffs and Central Bank Buying Accelerate

The price of gold (XAU/USD) has stormed to unprecedented levels, with futures trading at $3,809.60 per ounce, up 1.02% intraday, after opening at $3,781.50. That marks a 45% gain since January, making gold the best-performing asset of 2025, ahead of both the Magnificent 7 tech stocks and Bitcoin (BTC-USD). For the first time in modern history, gold has surpassed its 1980 inflation-adjusted peak, a landmark that underscores just how intense the rush for safety has become amid wars, tariffs, and sticky inflation. Over the past year alone, prices have soared 42% from $2,662 per ounce. On a monthly horizon, gold is up nearly 12% since late August, when it traded near $3,379.

Central Banks Redefine Reserve Strategies and Fuel Demand

The primary driver of the rally has been sovereign demand. Central banks now hold more gold than Treasuries for the first time since 1996, and gold has overtaken the euro as the world’s second-most held reserve asset. Purchases have more than doubled compared to the previous decade. Russia, China, and India continue to accumulate as hedges against dollar dominance, but the standout in 2025 is Poland, which has added 67 tonnes this year, nearly doubling its reserves in three years. This leaves Warsaw holding more bullion than the European Central Bank itself. Unlike previous cycles, many emerging markets are buying directly from domestic miners instead of the OTC market, reducing reliance on U.S. dollars. This structural shift shows governments are determined to build resilience after sanctions on Russia’s reserves in 2022 reshaped attitudes toward financial sovereignty.

Tariff Announcements Push Gold Toward $3,820

Geopolitical catalysts amplified gold’s surge this week. President Trump unveiled fresh tariffs ranging from 25% to 100% on pharmaceuticals, heavy trucks, and furniture imports, effective October 1. Branded pharma drugs face the harshest treatment with a full 100% levy unless manufacturing shifts to U.S. plants. Trucks and furniture will be taxed at 25–50%, while reports suggest chipmakers may also face penalties if production remains offshore. These measures rattled equity markets and underscored gold’s safe-haven status, driving prices from Thursday’s $3,736.90 close to Friday’s intraday high of $3,819.60.

Inflation Data Meets Estimates, Fed Cuts Still on the Table

The rally has coincided with the release of the Fed’s preferred inflation gauge, the PCE index, which came in at 2.7% annually and 2.9% core — right on target but the highest in seven months. Monthly gains of 0.3% suggest inflation is not collapsing, but investors still expect rate cuts later this year. The Fed has already priced in at least one more 25 bps reduction, though Danske Bank warned that sticky inflation could pressure policymakers. Yields on the 10-year Treasury sit near 4.18%, while the dollar index is weakening, adding to the bullish environment for gold.

ETF Flows Lag Behind Bitcoin, Signaling More Upside Potential

Despite gold’s record-setting run, ETF flows remain muted compared to crypto. U.S. Bitcoin ETFs account for about 7% of BTC’s total market cap, while gold ETFs represent less than 1% of bullion’s market capitalization. North American gold ETFs just posted their strongest inflows since March 26, but the comparison with crypto suggests room for more institutional adoption. Commodity strategists argue that if ETF allocations to gold rise to even half of Bitcoin’s ratio, another surge beyond $4,000 per ounce becomes plausible.

Technical Analysis: Bulls Eye $3,900 While Support Holds Firm

Technically, December gold futures show strong momentum, with Wyckoff’s Market Rating at 8.5 out of 10. Resistance is set at $3,824.60 and then $3,900, while immediate support lies at $3,749.70 and $3,718.10. A sustained close above $3,800 unlocks the path to retest $3,900, with upside momentum potentially extending to $4,000. On the downside, bears would need to drag futures under $3,650 to regain control, a scenario that currently looks unlikely given both macro support and sovereign demand. Silver (SI=F) is also confirming the metals rally, climbing to $45.35 with a Wyckoff rating of 9.0, and eyeing resistance at $47.50.

Private Investors Join the Cycle Through Retail Channels

Alongside central bank accumulation, private demand is expanding rapidly. Inflows into gold-backed ETFs have accelerated, and retail access points are broadening. Costco (NASDAQ: COST) now sells not just gold bars but also silver and platinum coins, attracting mainstream investors who want convenient exposure. The club retailer’s sales mirror broader sentiment: headlines about record prices are pulling in new buyers, reinforcing the feedback loop that drives gold higher.

Strategic Perspective: Is Gold Still Cheap Against Bitcoin?

Some analysts note that even at $3,800, gold may be undervalued relative to Bitcoin when comparing reserve ratios and ETF penetration. Gold remains under-owned by retail compared to crypto, suggesting that mainstream FOMO has not yet fully arrived. Bank of America’s survey ranks gold the second most crowded trade after the Mag 7, but whether this represents the first inning of institutional participation or the ninth remains contested.

Market Call: Bias Remains Bullish With Caution Near $3,900

With gold futures at $3,809.60 and spot levels near $3,800, the metal has cemented itself as the best-performing major asset of 2025. Central banks are stockpiling, tariffs are escalating, inflation remains elevated, and retail access is broadening. Support zones around $3,750 are holding firm, while technical upside targets point toward $3,900–$4,000. Despite talk of crowded positioning, ETF inflows remain far below crypto’s scale, leaving scope for more buying pressure. Based on the breadth of these catalysts, XAU/USD is a Buy, though traders should expect turbulence around resistance as profit-taking collides with sovereign and institutional demand.

Testing Resistance Near Key Zone

The rally continues to confront resistance between $3,782 and $3,812, where at least five indicators converge. While Friday’s move suggests a continuation of the broader uptrend, momentum is visibly slowing. Price could still extend toward the upper boundary of the zone, but traders are closely watching how gold reacts within this cluster of resistance levels.

Higher Targets if Breakout Sustains

A decisive breakout above $3,812 would open the door to higher projections. The most notable is a 261.8% extension of the large ABCD pattern at $3,896, derived from a harmonic relationship of two rising measured moves. Further up is a confluence zone from $3,982 to $3,998. That would be the next next key target zone, though it remains distant unless bullish momentum strengthens meaningfully.

Signs of Slowing Momentum

Despite price strength, momentum indicators flash caution. The Relative Strength Index (RSI) shows a bearish divergence, with price at new highs but momentum failing to confirm. This divergence, alongside current resistance near the top boundary of a rising trend channel, suggests upside breakouts may struggle to sustain without consolidation.

Short-Term Support Levels

Initial support rests at today’s low of $3,734, followed by the 10-Day moving average at $3,712. More significant is the 20-Day line at $3,650, reinforced by the broader structure of the channel. A drop below these levels would increase the likelihood of a deeper retracement, potentially signaling that gold’s rally has overextended in the short run.

Outlook

For now, the trend remains bullish with buyers holding the upper hand, and the record close this week reflects robust demand. Yet weakening momentum and proximity to key resistance levels warrant caution. Until price either breaks decisively above $3,812 or drops under $3,712, gold’s next directional move remains a contest between sustained buying and the risk of correction.

For a look at all of today’s economic events, check out our economic calendar.

Key Confluence at $3.35

The $3.35 price level carries added weight given that it coincides with the intersection of two significant trendlines — one rising and one falling. Should the market sustain strength through this zone, attention will naturally shift to the next confluence zone, around the 200-Day moving average at $3.49 and the 127.2% Fibonacci projection of the ABCD pattern at $3.51. The alignment of these levels suggests that if buyers can maintain momentum above $3.35, the path toward $3.49–$3.51 will become increasingly viable.

Moving Averages Signal Improving Demand

Another bullish development was the 20-Day moving average crossing above the 50-Day line, strengthening the short-term trend outlook. A daily close above either the rising or falling trendline near $3.35 would further validate this momentum shift, likely followed by additional signs of growing demand. On the downside, a healthy pullback could see price revisit the cluster of moving averages between $2.98 and $3.00, where the 10-Day, 20-Day, and 50-Day averages converge. That zone now represents a significant support area and could offer the foundation for a renewed leg higher once buyers return.

Weekly Chart Turns Bullish

On the weekly timeframe, natural gas is on track to close above last week’s high of $3.17, establishing a bullish outside week reversal. Importantly, this week’s price range also encompasses the ranges of the prior three weeks, emphasizing the strength of the move and signaling a clear shift in momentum. This type of price action often precedes sustained advances, particularly when accompanied by improving moving average alignment and strengthening channel dynamics.

Outlook

Overall, natural gas is showing early signs of turning the corner. A sustained breakout above $3.35 would not only confirm the rising ABCD pattern but also set the stage for a test of the longer-term resistance zone around $3.49–$3.51. Until then, traders will watch for whether the higher swing low established earlier this week holds, as that would further solidify the bullish reversal narrative.

For a look at all of today’s economic events, check out our economic calendar.