Gold News: Traders Eye Fed and Dollar Signals as Gold Rally Loses Steam

Gold Rally Targets Eighth Straight Weekly Gain as Rate Cut Bets and Safe-Haven Demand Fuel Bid

Gold is on track for its eighth consecutive weekly gain after bouncing off session lows Friday, driven by growing expectations for U.S. rate cuts, falling Treasury yields, and persistent geopolitical and political risk. With silver hovering just below record highs and the dollar off its recent peak, safe-haven demand remains firmly in play across the metals complex.

At 13:11 GMT, XAU/USD is trading $3986.63, up $10.39 or +0.26%.

Fed Rate Cuts and Treasury Yield Drop Keep Gold Bid Intact

Traders are pricing in a 95% chance of a 25 bp cut at the Federal Reserve’s October meeting, with another cut expected in December. That dovish repricing has capped real yields, with the 10-year Treasury sliding to 4.094% and the 2-year at 3.568%.

Fed minutes from September confirmed officials are increasingly concerned about labor market risks and open to easing policy despite lingering inflation worries. Comments from Fed Governor Christopher Waller and NY Fed’s John Williams further supported a cautious but easing-biased stance.

This dovish tilt has coincided with a broad economic data blackout due to the ongoing U.S. government shutdown, now in its tenth day. With little incoming data, traders are leaning on central bank rhetoric and risk sentiment — both of which favor gold in the near term.

Political Risk in Japan and Europe Adds to Gold’s Appeal

A volatile backdrop in FX markets is also helping gold. The yen is headed for its sharpest weekly drop in a year, down 3.5%, as traders pare back expectations for another BOJ rate hike following the ruling party’s shift under fiscal dove Sanae Takaichi. Intervention concerns are rising as USD/JPY hovers above 152.

In Europe, political uncertainty in France has weighed heavily on the euro, down 1.5% this week — its worst performance in 11 months. President Macron is struggling to name a new prime minister capable of pushing through a tightening budget, further denting investor confidence.

The dollar index is still holding near 99.33, but the rally appears to be losing steam, giving gold more breathing room.

Gold Price Forecast: Bullish Bias Holds Above $3888.43 Support

Technically, the gold trend remains bullish, but price is consolidating. The market is pulling back into minor support, with key pivots sitting at $3939.38 and $3888.43. Holding above this zone keeps the uptrend intact.

A move through $4059.35 will confirm a breakout and signal a resumption of the rally. But a break below the swing bottom at $3812.42 would shift short-term momentum to the downside for the first time since August.

For now, the bias stays bullish — but gold needs to stay above $3888.43 to avoid deeper profit-taking.

More Information in our Economic Calendar.