Gold Price Forecast: XAU/USD Rebounds Above $3,370 on Fed Pivot Bets

Gold Price Forecast: XAU/USD Surges Above $3,370 as Fed Pivot Bets Rise

Spot and Futures Prices Fuel the Forecast

Gold (XAU/USD) extended its rally on Friday, climbing 1% to $3,372.60 per ounce in spot trading while U.S. futures reached $3,416.90, their strongest close in nearly two weeks. December futures (GC=F) opened at $3,383.30, up from Thursday’s $3,336.90, and have gained 35.1% year-on-year from $2,504.10. The latest rebound comes as Powell’s Jackson Hole speech strengthened bets for a 25 basis point Fed cut in September, with CME FedWatch placing odds at 90%, compared to 75% just a day earlier. The softer dollar, down 0.7% on the DXY, and cooling Treasury yields reinforced bullion’s safe-haven appeal.

Key Technical Levels for XAU/USD

Gold’s trajectory is defined by pivotal chart levels. Immediate resistance stands at $3,400, a threshold that, if broken, opens the door toward $3,452 and $3,500. Support rests at $3,353, with deeper cushions at $3,319 and $3,300. The 50-day EMA around $3,344–$3,348 is being closely tracked as a pivot zone. Bulls argue that a sustained move above this band would solidify momentum and confirm an extension toward new highs, while a break below $3,350 risks exposing July’s lows.

Powell’s Policy Shift Shapes Gold Outlook

At Jackson Hole, Powell acknowledged a “challenging situation” for the Fed, with inflation still sticky yet labor market momentum showing cracks. Jobless claims hit 235,000, their highest since 2021, and continuing claims reached 1.972 million. Powell admitted the balance of risks has shifted, giving the market confidence that the Fed is moving closer to an easing cycle. Still, dissent remains: Cleveland’s Beth Hammack and Kansas City’s Jeffrey Schmid cautioned that inflation risks persist, while Atlanta Fed’s Raphael Bostic forecast just one rate cut in 2025, highlighting internal divisions. Despite the hawkish pushback, traders focused on Powell’s softer tone.

Global Demand and Regional Market Dynamics

Regional markets highlight the sensitivity of physical gold to local currencies. In the Philippines, prices eased to ₱6,112.34 per gram from ₱6,132.23, with a troy ounce fetching ₱190,130.30. Thailand saw gold flows affecting the baht, with stronger exports lifting the currency. These trends underscore gold’s dual role as both an inflation hedge and a currency stabilizer, particularly in Asia, where households frequently turn to bullion as a store of value during volatility.

Geopolitics and Treasury Market Support

Geopolitical risk continues to underpin demand. Russia renewed its demands on Ukraine regarding Donbas and NATO restrictions, boosting safe-haven positioning. Meanwhile, U.S. Treasury yields remain capped, with the 10-year at 4.328% and real yields near 1.978%, still favorable for gold. Dollar weakness against the euro and pound added to the bullish backdrop, while USD/JPY’s retreat reflected broader unwinding of long-dollar trades.

Institutional Forecasts Extend Bullish Case

Banks and funds remain firmly positive. Goldman Sachs projects $3,700 by end-2025, citing relentless central bank buying and tariff uncertainty. UBS and Citi echoed upside potential as Fed cuts draw closer. Central bank accumulation remains a key driver, with purchases at 50-year highs since January. On a structural level, Crescat Capital estimated that a revaluation of U.S. gold reserves relative to liabilities could justify astronomical prices between $25,000 and $55,000 per ounce — far from tactical reality but a reminder of bullion’s underlying leverage.

Silver, Platinum, and Cross-Metal Flows

Silver (SI=F) surged 2.2% to $39.01, nearing its July peak of $39.91. Platinum added 0.7% to $1,362.90, and palladium advanced 1.4% to $1,125.53. Silver’s outperformance in percentage terms suggests investors are broadening exposure to the precious metals complex, using gold’s breakout as a signal to diversify into correlated assets.

Retail Trends: From India Jewelry to Costco Gold Bars

Physical demand in India remains restrained due to high prices, though festival season may revive buying. In the U.S., gold’s mainstream reach expanded as Costco (COST) reported outsized demand for gold bars, silver coins, and platinum. With all three products up more than 22% YTD, retail penetration shows how bullion is becoming embedded in household wealth strategies beyond institutional and central bank demand.

Trading Strategy and Verdict for XAU/USD

The gold price forecast hinges on whether XAU/USD clears the $3,400 ceiling. A confirmed break higher signals a buy, targeting $3,452 and $3,500. If momentum stalls and $3,350 gives way, a tactical pullback toward $3,319 is likely. With Fed cuts looming, dollar softness, and robust central bank purchases, the structural case remains bullish, and the recommendation is Buy on dips toward $3,350 while maintaining upside exposure to $3,500.

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