Gold News: Bullish Gold Market Eyes $3879.64 as Rate Cuts and ETF Demand Strengthen

Gold Price Breaks Above Record High as Fed Cut Bets Drive Bullish Move

Spot gold surged on Monday, clearing its previous record high at $3707.56 and confirming a breakout that activates the next key swing chart target at $3879.64. While that level was originally projected for September 23, the rally has lost some time momentum.

Without a fresh catalyst—such as a dovish shift in Federal Reserve commentary or a weaker-than-expected inflation reading—the target may not be reached by Tuesday. However, the technical structure remains bullish, and $3879.64 continues to serve as the next upside objective.

At 10:13 GMT, XAU/USD is trading $3722.76, up $37.79 or +1.03%.

Fed Rate Cut Outlook Supports Gold Upside

Last week’s 25 basis point rate cut by the Federal Reserve, its first since December, has strengthened bullish conviction in gold. According to the CME FedWatch Tool, markets now price in a 93% chance of another cut in October and an 81% probability of a further cut in December. These expectations are underpinned by weakening inflation trends and softer labor market data.

Traders are now focused on key Fed commentary this week, especially from Chair Jerome Powell on Tuesday. The market is also awaiting Friday’s core PCE inflation print—widely viewed as the Fed’s preferred inflation gauge—which could provide critical direction for the rate path into year-end.

ETF Flows Signal Growing Western Demand

Gold has gained over 40% year-to-date, initially driven by central bank buying and robust demand from Asia. However, investor positioning appears to be broadening. UBS strategist Giovanni Staunovo noted a renewed appetite from Western investors, evidenced by rising gold ETF inflows. Expectations of further monetary easing and prolonged real yield suppression are driving portfolio allocations back toward gold.

Technical Levels Confirm Bullish Structure

Monday’s breakout above $3707.56 signals a continuation of the bull trend, with price now tracking toward the swing chart target at $3879.64. There are no confirmed resistance levels between the current price and that target. On the downside, short-term support is identified at $3627.96 and $3612.83. A break below these levels could indicate fading momentum, but does not yet invalidate the broader uptrend.

Gold Price Forecast: Bullish Outlook Maintained

The technical breakout, combined with growing rate cut expectations and favorable monetary conditions, reinforces a bullish outlook for gold. While the timing to reach $3879.64 may extend beyond initial projections, the breakout above $3707.56 confirms upward pressure. Traders will watch closely for Fed commentary and Friday’s inflation data as potential triggers for the next leg higher.

More Information in our Economic Calendar.