Gold (XAU/USD) Holds $3,410 Ahead of Breakout Test
Gold (XAU/USD) is consolidating near $3,410 after a steady August advance that carried the metal back toward the top of a multi-month symmetrical triangle. Spot prices have been trapped between $3,320 on the downside and $3,450 on the upside, with the most recent higher lows pushing the market back to resistance. The price action comes as the U.S. dollar softens and traders bet more heavily on a Federal Reserve rate cut in September, giving gold momentum into a potential breakout above $3,450.
Gold Futures Near Record High at $3,485
Friday’s session saw gold futures (GC=F) open at $3,477.20, up 1.3% from Thursday’s close of $3,431.80, with intraday trade briefly pushing near the all-time high of $3,485.60. On a one-month view, futures are up 4.6% compared to late July levels of $3,323.40, while the year-over-year gain is nearly 39% from $2,504.10 last August. That sustained climb reflects how deeply investors are positioning into bullion during a period of sticky U.S. inflation and tariff-driven trade friction. Goldman Sachs recently projected gold would reach $3,700 by year-end, which would mark a 40% gain in 2025.
Support and Resistance Levels Define Trade
Technically, immediate support is anchored by the 20-day EMA at $3,368 and the 50-day EMA at $3,346, while stronger cushions sit at the 100-day EMA around $3,274 and the 200-day near $3,095. The top end remains capped at $3,430–$3,450. A daily close above $3,450 would confirm a breakout, opening the path toward $3,500–$3,520, while a slip below $3,368 risks exposing $3,320 and deeper levels at $3,274. RSI on the daily chart sits near 59, showing positive momentum with space to extend before overbought conditions are triggered.
Macro Drivers Reinforce Bullish Tone
The macro backdrop continues to favor gold. The latest GDP revision to 3.3% growth in Q2 from 3% previously, combined with weekly jobless claims holding at 229,000, confirmed the U.S. economy’s resilience even under tariff pressure. Yet the PCE index at 2.6% and core PCE at 2.9% underline persistent inflation. With Fed governor Christopher Waller openly backing a September cut and suggesting further easing over the next three to six months, real yields are moderating, giving gold an edge as a non-yielding hedge.
Triangle Breakout and Rising Trend Structure
The price setup on intraday charts highlights an ascending trendline from the August low at $3,332, creating a bullish continuation pattern. The 50-SMA at $3,388 has acted as a reliable pivot, with each rebound confirming buyer control. Technical signals add weight: the MACD shows a positive crossover, while RSI has reset from overbought 64 to 58, a healthy cooling that keeps the trend intact. A breakout above $3,440–$3,450 would confirm the end of the consolidation and unlock new highs above $3,500, with some projections extending to $3,545 in the near term.
Broader Precious Metals Rally Supports Gold
The rally is not limited to gold. Silver (SI=F) has surged above $39 per ounce, gaining 6.5% in the month, while platinum and palladium are showing synchronized strength. Silver’s breakout above multi-year resistance adds conviction to gold’s move, as the two metals often confirm one another in bull phases. This sector-wide strength, alongside rising central bank purchases of bullion and geopolitical risk, provides a macro-technical alignment that makes dips above $3,398 attractive to buyers.
Dollar Weakness Amplifies the Case
The U.S. Dollar Index (DXY) has broken below both its 50-day and 200-day moving averages, trading near multi-month lows. The dollar’s decline from 109 earlier this year to 97 now represents a 17% drop, weakening the greenback’s appeal and boosting commodities priced in dollars. Fibonacci retracements point to further downside toward 95, which could keep gold bid into the autumn. Historically, gold rallies have accelerated when DXY breaks under long-term moving averages, and the current setup mirrors that pattern.
Outlook for XAU/USD
With support levels firmly defined and momentum strengthening, the short-term roadmap for XAU/USD hinges on the breakout above $3,450. Success here sets up a march to $3,500–$3,550, with medium-term projections reaching $3,700. Failure to hold above $3,368 would delay the breakout and open a test of $3,320–$3,274. On balance, the structure favors higher prices given macro conditions, broad commodity confirmation, and institutional positioning into bullion as protection against inflation and fiscal strain.
