Gold (XAU) Price Forecast: Bulls Aim for New Highs Despite Rising Treasury Yields

The dollar index strengthened to 104.24, capping a fourth straight week of gains. Strong economic indicators, including better-than-expected business spending data and improved consumer sentiment readings, dampened expectations for aggressive rate cuts from the Federal Reserve. Watch early Asian trading patterns Sunday evening as Japanese election results come in.

Rate Cut Expectations Cool – What’s the Fed’s Next Move?

Market positioning now shows a 95.6% probability of a 25 basis point rate cut at the Federal Reserve’s November meeting, down significantly from earlier expectations for more cuts. Fed officials are maintaining a cautious stance, with the Cleveland Fed’s Hammack making it clear that the inflation battle remains ongoing. Next week’s payroll numbers could completely reshape those expectations.

Short-term forecast: Safe haven demand tests technical limits

The near-term outlook for gold remains bullish despite opposing market forces. The rare combination of rising yields, dollar strength and rising gold prices indicate that haven buying is overshadowing traditional market relationships. Support holds at $2,708.76, with resistance at $2,758.53 becoming the next key target. Critical factors to monitor include:

• Weekend developments in Middle East tensions
• Early Asian market reaction to Japanese election results
• Technical resistance levels at $2,758.53
• Next week’s US payroll data, taking into account the effects of the Boeing strike