Gold Price (XAU/USD) Steadies at $3,660 After Record $3,707, $4,000 Forecast in Focus

XAU/USD Consolidates Near $3,700 After Historic Spike

Gold has been trading in a volatile range, holding between $3,660 and $3,692 per ounce after touching an all-time high of $3,707.40/oz earlier this week. The Federal Reserve’s decision to deliver a 25 basis point rate cut brought the federal funds rate down to 4.0%–4.25%, sparking a sharp rally that quickly reversed as the dollar regained strength. Despite the intraday pullback, gold remains up 41% year-to-date, cementing its place as the top-performing major asset of 2025.

Deutsche Bank Sees $4,000 Gold as Central Banks Drive Demand

Deutsche Bank lifted its 2026 gold price forecast to $4,000/oz, an increase from its earlier projection of $3,700/oz, reflecting growing conviction that structural demand will keep pushing the metal higher. Central banks are now purchasing gold at twice the pace of the 2011–2021 decade, with China leading the buying surge. Goldman Sachs suggested the rally could accelerate toward $5,000/oz if just 1% of privately held Treasuries is reallocated to bullion.

Fed Projections Spark Stagflation Concerns

The Fed’s Summary of Economic Projections forecasts 3.1% core inflation in 2025 and 4.5% unemployment, with inflation not expected to hit the 2% target until 2028. This outlook has revived stagflation fears, a backdrop that historically benefits gold. CME futures data showed volumes soaring by 200–300% above normal during the Fed meeting, reflecting large-scale repositioning as traders reacted to Powell’s cautious tone.

Technical Outlook: $3,600 Key Support, $3,800 Resistance Zone

Momentum indicators show gold remains firmly in an uptrend despite profit-taking. The $3,600/oz level is now seen as critical support, while the recent peak at $3,707 forms the immediate resistance. A break higher would target $3,800, while a pullback toward $3,550 would align with Fibonacci retracement levels. The SPDR Gold Trust ETF (GLD) reported a 0.44% reduction in holdings to 975.66 tonnes, a sign of tactical institutional repositioning rather than long-term liquidation.

Mining Equities Maintain Wide Margins

At spot prices above $3,600/oz, gold miners are reporting record profitability. With all-in sustaining costs averaging $1,200–$1,500/oz, major producers such as Barrick and Newmont enjoy extraordinary margins. Supply, however, remains constrained, as global mine output has plateaued despite record prices. Dundee Sustainable Technologies has introduced new refining technology that boosts concentrate grades by 31% while cutting arsenic by 99%, reflecting the industry’s push for efficiency and environmental compliance.

Dollar Correlation and Currency Dynamics

The U.S. dollar staged a rebound after Powell’s press conference, applying short-term pressure on gold. Historically, the correlation between gold and the Dollar Index (DXY) sits at -0.7 to -0.8 during easing cycles, reinforcing the inverse relationship. In Asia, demand remains strong, with gold priced at PHP 6,706.22 per gram in the Philippines this week, underscoring how international buying continues to mirror the global trend.

Structural Drivers: Debt Risks and Reserve Demand

Beyond day-to-day volatility, structural forces remain bullish. Central banks continue to add 650–700 tonnes annually, strengthening gold’s role as a hedge against sovereign debt and political interference in monetary policy. With the U.S. election cycle introducing additional uncertainty, and fiscal deficits widening, gold’s safe-haven appeal remains intact. Supply constraints, rising extraction costs, and environmental hurdles further support long-term pricing strength.

Investment View: XAU/USD Remains a Buy

With gold stabilizing near $3,660–$3,700/oz and forecasts stretching toward $4,000, the balance of evidence supports continued upside. While short-term corrections toward $3,600 are likely, the medium-term trajectory points higher as central bank accumulation and negative real yield risks persist. The investment stance on XAU/USD is Buy, with strategic allocations favored over speculative trades, targeting $3,800–$4,000 in the coming quarters.

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