Gold price spikes to $4380.99 but reverses lower
Gold (XAU/USD) surged to a fresh all-time high at $4380.99 on Friday before sharp profit-taking sent prices lower, putting the market at risk of forming a bearish closing price reversal top. A close below the session open would confirm the signal, increasing the odds of a near-term pullback.
At 12:53 GMT, XAU/USD is trading $3626.31, down $9.53 or -0.26%.
Despite the intraday reversal, gold remains on track for an 8% weekly gain — its strongest since December 2008. Early in the session, it had been positioned for its biggest weekly surge since the Lehman Brothers collapse in September 2008.
Fed rate cut bets grow as banking risks re-emerge
Support for aggressive easing is growing inside the Fed. Governor Waller and Stephen Miran both indicated backing for rate cuts at the upcoming FOMC meeting, citing mixed labor data and emerging signs of credit stress. Miran even pushed for deeper cuts than some colleagues support.
Ongoing fallout in the banking sector is adding urgency. Zions Bancorporation disclosed a $50 million loss tied to commercial loans, while Western Alliance reported fraud-related losses. These developments, paired with broader lending concerns, have traders pricing in a faster Fed pivot.
Yields edge lower while shutdown chokes economic visibility
Treasury yields softened as the U.S. government shutdown entered its 17th day. The 10-year yield dipped to 4.001%, while the 2-year yield slid to 3.451%. The lack of fresh macroeconomic data is making traders increasingly reliant on Fed commentary to guide expectations.
With shutdown uncertainty clouding the near-term picture, safe-haven demand remains elevated. The Fed’s Beige Book added to the dovish tone, highlighting layoffs and weakening consumer spending, especially among middle and lower-income households.
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See all Gold forecastsU.S. dollar weakens sharply as haven flows shift to gold and yen
The dollar index dropped 0.7% this week, its worst performance since July, as traders moved into gold, the Swiss franc, and the yen. USD/JPY broke below 150.00 for the first time in nearly two weeks, helped by comments from BOJ Governor Ueda pointing to a possible rate hike.
With trade tensions resurfacing and confidence in U.S. regional banks under pressure, traders are rotating into assets less exposed to fiat risk. Gold and crypto are attracting attention under what Pepperstone’s Dilin Wu called a “debasement” trade.
Gold price forecast – key support at $4162.71 if reversal top confirms
If today’s close confirms the bearish reversal, follow-through selling could open the door to a decline toward the pivot at $4162.71. Bulls need to retake $4380.99 to resume the uptrend.
The short-term bias shifts to neutral-to-bearish unless gold can reclaim session highs. Next week’s Fed speak, along with any new credit headlines or shutdown resolution, will be key for directional momentum.
More Information in our Economic Calendar.
