Gold Price Forecast - XAU/USD at $3,774 Eyes Breakout Above $3,791 as Fed Cut Bets and Record Central Bank Buying Converge

XAU/USD Rally Extends as Gold Hits $3,760 and Heads Toward $3,800 Resistance

Gold (XAU/USD) continues its historic 2025 surge, climbing 43% year-to-date and trading near $3,760 per ounce, putting bullion on track for its strongest year since 1979. Futures briefly tested $3,791.26, just shy of a fresh record, while intraday support remains firm at $3,709.61. Momentum has been relentless, with inflows into global ETFs surpassing $10.5 billion in September alone, and cumulative allocations exceeding $50 billion year-to-date. On a structural level, central bank demand has created a durable price floor, with official sector buying estimated at 1,000 metric tons in 2025, following a record 1,086 tons in 2024.

Central Banks Reinforce Gold’s Bullish Structure With Relentless Accumulation

Global monetary authorities are reshaping the gold market. China has now expanded reserves for the 10th consecutive month, bringing holdings to nearly 74 million ounces, while Russia, India, and Turkey remain consistent buyers. Central banks account for 25% of annual demand, a level unseen in modern history, transforming gold from a tactical hedge into a strategic reserve asset. This “de-dollarization” trend reflects a shift away from U.S. Treasuries, with countries seeking sanction-resistant stores of value. Strategically, this behavior cements $3,600–$3,700 as a structural floor, as central banks repeatedly intervene during corrections.

Fed Easing Bets Keep XAU/USD Anchored Above $3,700 Despite Dollar Strength

The Fed’s September 25 bps rate cut provided a fresh impulse to bullion. According to CME FedWatch, traders price in an 88% probability of another cut in October and 65% odds in December. Even with August core PCE inflation at 2.9% year-over-year and GDP growth at 3.8%, investors are betting on further easing. The U.S. Dollar Index (DXY) remains resilient at 98.18, but real yields are sliding, with the 10-year Treasury holding at 4.18% and real yields at 1.80%. This macro backdrop bolsters gold, as the opportunity cost of holding non-yielding assets declines.

ETF Inflows and Retail Demand Fuel Gold’s Momentum Beyond Institutional Buying

Alongside central bank support, investment flows have reached historic levels. Global ETF holdings climbed above 3,615 tons this year, while silver ETFs added 95 million ounces in H1 2025. Retail appetite is just as aggressive: India’s domestic gold price surged to a record ₹110,666 per 10g (approx. $3,800/oz), while imports jumped 37% in August to $5.4 billion. Local jewelers report a drying scrap supply as households refuse to sell, anticipating higher prices. In the U.S., Costco’s gold bars sell out in hours, and physical coin demand remains elevated. These signals reflect a broad, sticky bid across investor segments.

Geopolitical Risks Amplify Bullion’s Safe-Haven Premium

Gold’s advance is further reinforced by geopolitics. The Russia-Ukraine war continues to disrupt energy markets, while fresh U.S. tariffs — including 100% on pharmaceuticals and 40% on furniture imports — add to uncertainty. China’s green energy commitments are also reshaping demand: silver surged 14% YTD, reaching $46 per ounce, as solar manufacturing intensified. Platinum gained 50% in 2025, climbing above $1,568, its highest in 12 years, while palladium rose above $1,280. Investors are now treating bullion and its peers as systemic hedges, with analysts noting that each new conflict or tariff shock sends fresh inflows into gold.

Technical Signals Point to $3,879 Breakout or $3,700 Retest

From a charting perspective, gold remains in a strong bullish channel. A breakout above $3,791.26 would open the path to $3,879.64, while failure to hold $3,709.61 support risks a pullback toward $3,627.96. Momentum oscillators remain stretched: RSI sits near 78, signaling overbought conditions, but price action has repeatedly consolidated in bullish flags rather than topping patterns. The 200-day SMA at $3,648 reinforces a rising long-term floor, while sentiment remains far from euphoric, suggesting further upside before speculative exhaustion sets in.

Analyst Targets Cluster Around $3,800–$4,000 With Longer-Term $5,000+ Potential

Wall Street remains broadly bullish. Goldman Sachs targets $3,700 for 2025 year-end and $4,000+ in 2026, while OCBC Bank expects $3,900 by year-end. RBC strategist Nicholas Frappell and Metals Focus’s Philip Newman both highlight $3,800 as a base case with upside toward $4,000 in 2026. Longer-dated calls stretch further: forecasts for 2029–2030 range from $5,000 to $7,000 per ounce, premised on sustained central bank buying, weaker fiat credibility, and geopolitical fragmentation.

Investment Verdict: XAU/USD Remains a Strong Buy Into Year-End

The convergence of record central bank buying, ETF inflows, persistent inflation above 2.5%, and structural supply stagnation at ~4,000 tons annually creates a rare alignment for gold. With spot gold at $3,760 and technicals pointing toward $3,879–$4,000, the market retains strong bullish momentum. Risks of corrective dips remain, but structural demand support from sovereigns and institutions suggests these dips will be shallow. Based on current evidence, gold (XAU/USD) is firmly a Buy, with year-end targets clustered between $3,850–$3,950, and potential overshoots above $4,000 if U.S. jobs data and Fed cuts align in October–December.

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