Gold News: Overbought Gold Tests Trader Nerves—Buy Strength or Wait for Pullback?

Gold Price Stalls Below Record High as Traders Weigh Dollar Strength and Fed Uncertainty

Spot gold (XAU/USD) is treading water just beneath Wednesday’s all-time high at $4059.35, as traders hesitate to chase fresh highs into stretched territory. With no defined resistance above, the uptrend technically remains intact, but early Thursday action showed a light seller presence—raising the risk of a reversal top if short-term support breaks.

The key technical signal to watch is a daily closing price reversal. A move below Wednesday’s low at $3984.32 would confirm near-term weakness and open the door to the first downside pivot targets at $3939.38 and $3888.43. Bulls still have the dip-buying play in hand, but the overbought setup and loss of momentum near the highs may start to test conviction.

At 11:56 GMT, XAU/USD is trading $4044.37, up $2.47 or +0.06%.

Dollar Rally Caps Gold Upside as Euro and Yen Slide

The U.S. Dollar Index is pushing toward 100.000, up 0.20% to 99.038 after blowing through prior resistance levels at 98.605, 98.635, and 98.834. The 50-day moving average at 97.986 has turned into a launchpad for dollar strength, fueled by weakness in the euro and yen.

The euro fell to $1.1609, a level not seen since August, as French political instability rattled sentiment. PM Lecornu’s resignation and Macron’s surprise move to appoint a new prime minister triggered a pullback, though some euro support returned on expectations of reduced election risk.

Meanwhile, the yen is under renewed pressure, dropping 0.27% to 153.07 after Sanae Takaichi’s rise in Japan’s ruling party stoked bets on continued fiscal stimulus and dovish monetary policy. The yen is down nearly 4% on the week, reinforcing dollar strength that’s weighing on gold.

Fed Cut Hopes Clash with Inflation Risks and Data Gaps

Federal Reserve minutes released Wednesday showed policymakers edging toward a rate cut due to labor market risks, though still concerned about sticky inflation. Traders are pricing in a 25 basis point cut at the next meeting, but the unresolved U.S. government shutdown is complicating the Fed’s picture, with key economic data potentially delayed.

This policy fog is creating uncertainty in the bond market. The U.S. 10-year yield edged up to 4.125% but remains rangebound as foreign demand comes under scrutiny. Custody holdings at the New York Fed fell to $2.78 trillion—lowest since 2012—raising questions about global appetite for U.S. debt and the dollar.

Gold Price Forecast: Bulls Still in Control, but Watch for Reversal Triggers

Gold holds its bullish bias while trading above $3984.32, but traders should watch closely for signs of exhaustion near the record high at $4059.35. A closing price reversal today would be the first red flag. A break below $3984.32 would confirm a short-term shift in control and put $3939.38 and $3888.43 in play.

No resistance means the uptrend can resume quickly on fresh strength—but with the dollar surging and gold technically overbought, chasing highs carries risk. Keep your focus on price behavior around yesterday’s low and look for clean signals before taking sides.

More Information in our Economic Calendar.