Gold Price Forecast - XAU/USD Surges 47% YTD: XAU/USD at $3,844 With $4,000 in Sight Amid Shutdown and Fed Cuts

Gold Price (XAU/USD) Extends Record Run as Safe-Haven Demand Surges

Gold continues to dominate global markets, with XAU/USD trading near $3,844 after briefly dipping toward $3,820 before recovering. The metal is on pace for a seventh straight weekly gain, rising 47% year-to-date and gaining 14% just since late August, making it one of the strongest asset classes in 2025. Futures in India also reflect the surge: MCX December contracts fell slightly to ₹1,16,945 per 10 grams, while the February 2026 contract cooled from a record ₹1,19,674 per 10 grams to ₹1,18,213, highlighting mild profit-taking at these peaks.

Geopolitical and Macro Drivers Underpinning XAU/USD Momentum

The rally is being fueled by the U.S. government shutdown, which entered its second day and created a data blackout from the Bureau of Labor Statistics. Nonfarm Payrolls data may not be released on schedule, amplifying uncertainty. Meanwhile, the Federal Reserve’s pivot is firmly in play, with markets pricing a 99% chance of a 25 bps rate cut at the October 29 FOMC meeting, bringing the fed funds rate into the 3.75%–4% range. Dallas Fed President Lorie Logan warned that inflation remains elevated, but traders see political paralysis and slowing labor momentum as catalysts for easing. This environment has pushed investors aggressively into safe havens, boosting gold alongside falling Treasury yields, with the 10-year yield slipping to 4.08%.

Regional Prices Confirm Strength Across India’s Hubs

Spot bullion rates in New Delhi were quoted at ₹1,17,000 per 10 grams, while Mumbai rates reached ₹1,17,190 per 10 grams. Silver also tracked higher, with New Delhi at ₹1,42,910/kg and Mumbai at ₹1,43,050/kg. On the MCX, gold futures traded at ₹1,16,290 per 10 grams, underscoring the intensity of futures-driven flows as traders hedge against policy and fiscal risk. This synchronized move across India’s largest bullion centers reinforces that the rally is broad-based and not speculative in isolation.

ETF and Central Bank Flows Signal Long-Term Commitment

A critical underpinning of the rally is the massive inflow into Western ETFs, with holdings up 109 tonnes in September alone, compared with Goldman Sachs’ model estimate of just 17 tonnes. This shows private investors are rotating away from bonds into bullion at an accelerated pace. Central bank buying remains strong, with emerging market institutions continuing to diversify away from the U.S. dollar. According to Goldman, speculation has contributed only about 1 percentage point of the 14% rally since August 26, meaning the surge is being driven by structural flows, not hot money.

Profit-Taking Emerges but Downside Remains Limited

Analysts note that after such an aggressive run, technical indicators show gold in “overbought” territory. Thursday saw MCX December futures dip ₹643 (-0.55%) as traders booked profits, snapping a five-day winning streak. Still, market watchers suggest pullbacks will be shallow. Support for XAU/USD sits near $3,793, with a stronger floor at the 20-day moving average around $3,713. Upside levels to monitor include $3,850, $3,895, and $3,900, with a sustained break above $3,900 potentially triggering a new wave of inflows.

Goldman Sachs Raises Alarm on $4,000 Ceiling Break

Goldman Sachs reiterated gold as its “highest-conviction long commodity recommendation,” lifting expectations above its mid-2026 target of $4,000/oz. The bank argues that even minor portfolio shifts from fixed income into gold could unleash another leg higher given the relative size of bond markets. Structurally higher central bank accumulation, coupled with ETF inflows, is building the case for bullion exceeding $4,000 much sooner than initially projected.

Short-Term Technicals and Market Sentiment

From a technical perspective, XAU/USD is consolidating above the EMA50 and riding a supportive bullish trendline, reinforcing upside bias. RSI readings are stretched but remain above the midline, suggesting momentum is intact despite near-term exhaustion signals. A daily close above $3,850 would open the door to retesting $3,895 and $3,900, while a failure to hold $3,832 could invite corrective moves toward $3,793. Sentiment is overwhelmingly bullish, yet the emergence of profit-taking shows traders are cautious at record valuations.

Investment Verdict on XAU/USD

Factoring in the 47% YTD gain, the structural ETF inflows, central bank buying, Fed easing bets, and political turmoil from the U.S. shutdown, gold remains a BUY at current levels. Near-term pullbacks toward $3,793–$3,800 should be seen as entry opportunities, with medium-term upside targets stretching toward $4,000–$4,200 per ounce. Given the macro backdrop, XAU/USD continues to justify its role as the strongest hedge in 2025, even as volatility around these record levels persists.

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