Gold (XAU/USD) Climbs Toward $3,500 as Fed Cut Bets, Central Bank Buying, and Economic Strains Collide

XAU/USD Pushes to Record Highs Above $3,440

Gold prices have staged one of the most decisive rallies of 2025, with XAU/USD trading between $3,375 and $3,450 during the final week of August before briefly touching $3,511.50 in futures. Spot gold closed at $3,443.50, up 2% weekly and 4.7% for the month, cementing a breakout from the summer consolidation. The market’s momentum was driven by a combination of macroeconomic uncertainty, dovish Federal Reserve expectations, and aggressive flows from both institutional investors and central banks.

Federal Reserve Pressure and the PCE Catalyst

The rally was anchored by the U.S. PCE inflation index, which rose 2.9% YoY in July, in line with forecasts but still well above the Fed’s 2% target. While inflation remains sticky, Jerome Powell’s Jackson Hole speech underscored a shift toward prioritizing economic slowdown and labor market weakness. Markets are now pricing an almost 100% probability of a 25bps rate cut on September 17, with Powell signaling that restrictive policy risks outweigh inflation concerns. A GDP revision showing +3.3% QoQ growth in Q2 further emboldened traders betting the Fed will move sooner rather than later. The prospect of lower real rates has historically underpinned gold’s role as a non-yielding store of value, and the latest rally is consistent with that playbook.

Central Banks Accelerating Gold Accumulation

Behind the retail and ETF flows lies a deeper structural shift. Central banks have been net buyers at historic levels, increasing their bullion share of reserves to nearly 20%, up sharply from 10% in the late 1990s. Notably, the Saudi Central Bank recently revealed large allocations not only to gold but also to silver-linked ETFs, a rare diversification that highlights sovereign appetite for hard assets. This accumulation is reshaping the demand base for gold, providing steady support even as speculative flows ebb and flow. Analysts highlight that central bank activity is a direct contradiction of their official rhetoric of monetary stability, implying genuine concern over dollar volatility and geopolitical fragility.

Labor Market Cooling and Recession Signals

Gold’s strength also reflects investor anxiety around the U.S. labor market. Surveys show that 20% of Americans fear job loss, a level rarely seen outside recessions. Real consumer spending expanded just 1% annualized in H1 2025, while auto and housing purchase intentions slumped to levels reminiscent of the 2007 pre-recessionary environment. Case-Shiller home price data revealed four straight months of declines, and pending home sales dropped to levels below the 2008 Great Recession trough. This deflationary signal in housing – the single largest household asset – is pushing investors toward gold as a hedge against both financial instability and household wealth erosion.

Technical Strength as Gold Clears Key Resistance

From a technical perspective, gold’s breakout above $3,350 was a critical event. For months, XAU/USD was locked in a $34 range between $3,314 and $3,348, capped by the 50-day moving average. The breach of this ceiling has unleashed new buying momentum, targeting $3,450–$3,500. December futures closing above $3,500 would confirm continuation, with the next resistance zones at $3,534 (record spot) and $3,600 psychological level. Support levels sit at $3,400 and $3,350, with consolidation expected if macro catalysts remain mixed. Dollar weakness – down 8% YTD – is adding fuel, making gold more attractive to international buyers.

Silver Riding Gold’s Momentum but Still Lagging

While gold dominates headlines, silver (XAG/USD) has been quietly staging its own breakout, closing at $39.72, its highest level since 2011 and within reach of the $40 psychological mark. The gold-to-silver ratio remains at 86, above its historical 50–60 average, leaving room for silver to catch up. Institutional inflows are rising, with sovereign wealth funds like Saudi Arabia allocating to iShares Silver Trust (SLV) and Global X Silver Miners ETF (SIL). This marks a significant shift in market structure, as silver has long been dominated by retail demand. Its industrial applications in photovoltaics and electronics add another layer of support, aligning with global green energy expansion.

Trade Tensions, Tariffs, and Geopolitical Risk Driving Safe-Haven Demand

Global trade frictions are also shaping flows into gold. U.S. tariffs, including Trump’s broad-based 10% duties, are lifting import costs and dampening global trade. Canada’s economy contracted 1.6% in Q2, its sharpest drop since the pandemic, underscoring ripple effects. Meanwhile, a U.S. appeals court ruling most Trump tariffs illegal raises questions about policy continuity. This political uncertainty, combined with ongoing geopolitical risks, enhances gold’s attractiveness as a hedge against fractured global trade.

ETF Flows Show Volatility but Net Support for Gold

ETF data reveals turbulence in late August. Gold ETFs like GLDM recorded $449M outflows in one week, but reversed into inflows by month’s end, mirroring Bitcoin ETFs, which also recovered after heavy liquidations. This simultaneous rebound in both assets suggests investors are not abandoning hard assets but reallocating tactically. Overall, gold ETF assets under management remain at record highs, aligning with broader institutional demand.

Mining Equities and the Bond-Bullion Barbell Strategy

Gold mining equities continue to provide leveraged exposure to bullion. With gold above $3,400, margins for miners expand significantly, pushing earnings well beyond baseline metal gains. Analysts highlight the bond-bullion barbell strategy, which delivered 18.5% YTD returns, outperforming the S&P 500 by 700 basis points. Mining equities, combined with physical gold and ETFs, are seen as a diversified approach for investors seeking both yield and exposure.

Verdict: XAU/USD Rating – BUY (Bullish Bias, Target $3,500–$3,600)

Gold (XAU/USD) near $3,443 is supported by dovish Fed expectations, central bank accumulation, weakening labor and housing markets, and dollar softness. Technicals confirm bullish breakout momentum, with $3,500 in clear sight. The macro environment favors continued accumulation, with downside risk limited to the $3,350–$3,400 zone. Unlike past cycles where retail demand dominated, today’s rally is anchored by sovereign buying and institutional flows, giving it greater structural resilience. At current levels, gold is firmly a BUY, with year-end upside potential toward $3,600 if September’s jobs data and Fed cuts align.

That’s TradingNEWS

Key Resistance Levels Ahead

Despite the breakout, confirmation of further strength remains essential. The next key resistance is the all-time high at $3,500. Sustained trade above June’s high of $3,451 would improve the odds of new record highs. A monthly high close provides encouraging evidence that bulls are in control, but maintaining momentum through these critical resistance levels will be important.

Measured Move Targets

From a technical perspective, the triangle projects potential upside targets near $3,820 and $4,053. The first target is based on direct price measurement, while the second is percentage-based. In the nearer term, an initial resistance zone emerges between $3,578 and $3,595, defined by the confluence of two indicators. This price area could serve as the next milestone for buyers if a new high in gold is confirmed.

Support from Long-Term Averages

Gold’s latest upswing also benefited from strong trend support. The recent downswing found buyers at the 20-Week moving average, and the prior swing low also found support at that line. Each rebound from this average confirms solid underlying demand and reinforces the integrity of the broader bull trend. These repeated reactions show that investors continue to defend long-term support levels.

Demand Must Confirm Breakout

While technical projections point to higher levels, targets are the least reliable element of analysis and require confirmation through continued strength. Also, breakouts, even when clear, can fail if demand slows. Risk management remains critical for traders navigating the move. Still, the clarity of the triangle, combined with Friday’s breakout, suggests that strong momentum should follow. Sustained strength above $3,451 would firmly establish gold’s path toward new record highs.

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

Confirmation from Moving Averages and AVWAP

Thursday’s close above the 20-Day moving average at $2.89 gave a clear signal of improving momentum. Natural gas also reclaimed the anchored volume-weighted average price (AVWAP) near $2.96, which had been an important reference level. Yesterday’s $2.99 close confirmed this breakout, while prior resistance at $2.97 has shifted to support. A second consecutive close above the AVWAP today would strengthen the bullish case.

Long-Term AVWAP Recovered

The long-term AVWAP, drawn from the 2024 trend low, had acted as dynamic support for much of the year before breaking down in August. Its recovery this week signals buyers are regaining control of the longer-term trend. That development improves the probability of a sustained move higher and shifts market tone toward accumulation rather than distribution.

Channel Structure Supports Further Gains

Price action has also respected the structure of a large descending parallel channel. The channel’s midpoint was reclaimed yesterday, with today’s low bouncing from support near $2.92. Earlier, the August swing low at $2.62 reversed higher from the 78% retracement of the channel, confirming recognition of the structure. This behavior strengthens the outlook for further gains while keeping the broader channel pattern intact.

Upside Targets in Focus

Once price reverses from the lower side of a channel, the opposite side often becomes the next logical target. For natural gas, that points to an upside zone at $3.15–$3.19, which also matches measured objectives from the wedge breakout. Adding weight to this level, the 50-Day moving average has now aligned at $3.18, making it a key resistance area to monitor. A decisive breakout would open further upside potential, while hesitation here could lead to consolidation or weakness.

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

The (Brent) price witnessed fluctuated move on its last intraday levels, amid its attempts to breach the current resistance level at $67.60, this level was our yesterday’s suggested target, taking advantage of the dynamic support that is represented by its trading above EMA50, and under the dominance of the bullish correctional trend on the short-term basis and its trading alongside a supportive bias line for this track, on the other hand, we notice the emergence of negative overlapping signals on the (RSI), after reaching overbought levels, which might decelerate the rise.

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• Silver consolidates gains on Monday as the US Dollar and Treasury yields stabilize in the aftermath of Powell’s speech at Jackson Hole.
• Fed Chair Powell’s Jackson Hole speech reinforced expectations for a September rate cut, weighing on the US Dollar.
• XAG/USD holds above key support levels, with the 100-period SMA and former triangle top offering a strong floor near $38.00.

Silver (XAG/USD) is holding firm near a one-month high on Monday, consolidating the gains that followed a strong bullish breakout on Friday. The metal surged above the upper boundary of a symmetrical triangle formation after Federal Reserve (Fed) Chair Jerome Powell delivered dovish remarks at the Jackson Hole Symposium, reinforcing expectations for a September rate cut. The subsequent drop in the US Dollar and Treasury yields fueled a broad-based rally in precious metals, with Silver climbing to its highest level since July 25.

At the time of writing, XAG/USD is trading around $38.90, having posted an intraday low of $38.57 during the European session. The metal appears to be digesting recent gains as market participants reassess Fed policy outlook and await fresh catalysts. Despite Monday’s sideways movement, the broader technical picture remains tilted in favor of the bulls.

From a technical perspective, the breakout above the triangle’s upper trendline and the psychological $38.00 barrier marks a significant shift in near-term momentum. The move also confirmed a continuation of the broader uptrend that had been in consolidation for most of August.

Momentum indicators continue to favor the bulls. The Relative Strength Index (RSI) has risen to 68, near overbought territory, but still suggesting strong underlying demand. The Moving Average Convergence Divergence (MACD) also shows a positive crossover above the signal line, with rising histogram bars that confirm bullish momentum is building.

Looking ahead, a sustained move above Friday’s high at $39.06 could open the door for a test of the next key resistance at $39.53, which marks the multi-year peak. A breakout above this zone would likely reinforce bullish conviction and open the door for a run toward the psychological $40.00 level.

On the downside, initial support is seen at $38.50, followed by the 100-period SMA around $37.98, which closely aligns with the upper boundary of the broken triangle pattern. A drop below this confluence support could invite a retest of the $37.50 pivot zone. While this level triggered the recent bounce, a sustained break beneath it would mark a bearish shift and expose Silver to further downside toward the $37.00 level.

Overall, the technical outlook for XAG/USD remains bullish in the near term, supported by strong breakout confirmation, favorable macro conditions, and rising momentum. As long as Silver holds above $38.00, dips are likely to be viewed as buying opportunities, with scope for the rally to resume toward multi-year highs in the days ahead.

At 11:52 GMT, XAU/USD is trading $3410.80, down $6.26 or -0.18%.

Support Levels Lined Up Below as Bulls Guard the Trend

That being said, gold is not without downside risk. Traders are still watching $3,367.37 as a nearby floor, with the pivot at $3,353.58 and the 50-day moving average at $3,348.80 just below. That 50-day is quietly running the show—dip-buyers have defended it well, and sellers haven’t managed a daily close beneath it since August 21.

Dollar Soft, Yields Muted, and Political Risk Creeping In

The broader backdrop is helping gold stay afloat. The U.S. dollar is heading for a 2% monthly drop, while Treasury yields remain soft despite ticking slightly higher Friday. Political noise is also in the mix—President Trump’s attempts to fire Fed Governor Lisa Cook have sparked concerns over the Fed’s independence. That’s not driving big flows just yet, but the potential for credibility risk is now priced into the longer end of the curve.

Rate Cut Odds Climb as Fed Doves Get Louder

On the rate front, traders are locking in bets. There’s now an 85%+ chance of a September rate cut, according to CME FedWatch. Fed Governor Waller said Thursday he wants to start cutting next month—and expects more to follow.

If Friday’s PCE data comes in around expectations (0.2% m/m, 2.6% y/y), it likely keeps that dovish tilt intact. But a hotter print north of 3% would catch markets offside and could send gold back under $3,400 fast.

Gold Prices Forecast: Bullish Tilt Holds, But Ceiling Still Intact

We’re still seeing buyers step in on dips, and as long as gold holds the 50-day, bulls have the upper hand. But it doesn’t take a lot of imagination to see how quickly sentiment could sour on a hot PCE read. More likely than not, gold continues to consolidate between $3,350 and $3,450 until we get clearer data next week. Time will tell, but for now, the market wants to believe in a dovish Fed.

Natural gas prices are affected by stochastic positivity, to keep forming bullish correctional waves, recovering more of the losses by hitting $3.010 level, approaching from the neckline of the negative head and shoulders that appear in the above image.

 Note that the stability of the trading below the resistance at $3.160, and the attempts of the main indicators to provide the negative momentum, these factors support the bearish suggestion, to expect reaching $2.810, then attempts to press on the barrier near $2.620, while the price success in breaching the resistance will cancel the bearish suggestion, providing chances for building new bullish track in the upcoming period trading.

The expected trading range for today is between $2.810 and $3.050

Trend forecast: Bearish

The (Brent) price witnessed fluctuated move on its last intraday levels, amid its attempts to breach the current resistance level at $67.60, this level was our yesterday’s suggested target, taking advantage of the dynamic support that is represented by its trading above EMA50, and under the dominance of the bullish correctional trend on the short-term basis and its trading alongside a supportive bias line for this track, on the other hand, we notice the emergence of negative overlapping signals on the (RSI), after reaching overbought levels, which might decelerate the rise.

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• Gold retreats from near five-week highs of $3,423 amid pre-US PCE data repositioning.
• The US Dollar consolidates the Asian rebound as Fed concerns remain a drag.  
• Technically, Gold recaptures $3,400 on Thursday’s closing basis, the daily RSI remains bullish.

Gold is pulling back from near five-week highs of $3,423 set on Thursday, snapping a three-day uptrend early Friday. Traders now await the US core Personal Consumption Expenditures (PCE) Price Index for a boost in Gold.

Gold: All eyes on US PCE inflation data

Gold is bearing the brunt of the overnight bounce in the US Dollar (USD) as traders resort to position adjustments ahead of the critical US inflation data.

However, resurfacing concerns over the US Federal Reserve’s independence check the US USD rebound, leaving Gold in an upside consolidative range near five-week highs.

US Vice President JD Vance’s comments in a USA Today interview on Thursday confirmed the end of the Fed’s autonomy, pressuring the Greenback once again.

In another instance about doubts over the Fed’s independence, Fed Governor Lisa Cook filed a lawsuit on Thursday against US President Donald Trump’s effort to fire her.

Trump, in his latest tweet, referring to a Bloomberg piece on a third property transaction now being questioned, said: “Pulte ups Cook scrutiny with criminal referral on third mortgage.”

Meanwhile, Fed Governor Christopher Waller’s dovish remarks also continue to undermine the sentiment around the buck.

Waller said that he would support an interest-rate cut in the September meeting and further reductions over the next three to six months to prevent the labor market from collapsing, per Reuters.

Markets maintain their expectations for a September interest rate cut at around 87%, according to the CME Group’s Fed Watch Tool.

Against this background, the Fed’s favorite inflation measure, the core PCE Price Index, will be closely scrutinized for fresh clues on further easing by the Fed beyond the September meeting.

The core PCE inflation is seen steadying at 2.6% year-over-year (YoY) and 0.3% month-over-month (MoM) in July.

Any downside surprise in the core PCE figures could ramp up Fed rate cut bets, boosting the non-yielding Gold at the expense of the USD and vice versa.

Gold price technical analysis: Daily chart

The short-term technical outlook for Gold continues to paint a rosy picture amid a bullish crossover and a 14-day Relative Strength Index (RSI)

The leading indicator is currently flirting with the 60 level.

Meanwhile, the 21-day Simple Moving Average (SMA) closed above the 50-day SMA on Monday, confirming the bullish crossover.

The immediate topside hurdle is seen in the previous day’s high of $3,423, above which the static resistance at around $3,440 will come into play.

Further up, the June 16 high of $3,453 will be put to the test.

On the flip side, the immediate support is located at the previous day’s low of $3,385, below which sellers will attack the 21-day SMA at $3,366,

A sustained break below the latter will expose the 50-day SMA at $3,349.

Copper price faced stochastic negativity by its stability above the extra support at $4.2600, keeping the chances for renewing the bullish attempts, while gathering the bullish momentum makes us expect targeting $4.6200, pressing on the barrier near $4.7500 to find an exit to resume the bullish attempts.

While the risk of changing the main trend is represented by forming a sharp decline, to settle below the support of the bullish channel towards $4.0750, which forces it to suffer several losses by reaching $3.9200 initially.

The expected trading range for today is between $4.3000 and $4.6200

Trend forecast: Bullish