Gold (XAUUSD) Price Forecast: Breakout Above $4192.36 Signals Push Toward Record High

Gold Price Rally Extends as Traders Bet on Higher Debt and Fed Cuts

Spot gold jumped to a fresh three-week high on Thursday, fueled by expectations of rising U.S. debt levels and growing bets on another Fed rate cut in December. The market also gained technical traction after crossing to the strong side of a key retracement zone, signaling further upside could be in play.

At 12:40 GMT, XAUUSD is trading $4223.05, up $27.84 or +0.66%.

The Record High at $4381.44?

XAU/USD surged past the short-term retracement zone between $4133.95 and $4192.36, turning it into immediate support. The move positions gold for a potential test of the all-time high at $4381.44, especially if price action remains firmly above $4192.36. Failure to hold above this zone would be an early sign of seller interest returning.

A break back below the 50% retracement at $4133.95 could shift the near-term bias to the downside, potentially opening the door to a deeper pullback toward the 50-day moving average at $3929.58.

Debt Surge and Fed Uncertainty Driving the Gold Market

Fundamentally, gold is catching a bid on the back of rising U.S. debt concerns following the resolution of the 43-day government shutdown — the longest in history. With President Trump signing legislation to reopen federal operations through January 30, traders now expect a surge in borrowing. The U.S. deficit is projected to grow by $1.8 trillion annually, which has revived interest in hard assets like gold.

“Precious metals are rallying alongside equities as traders continue to front-run dovishness,” said Hugo Pascal, a precious metals trader at InProved. He added that the debt implications from the shutdown resolution are likely to keep supporting gold prices.

Fed Rate Cut Bets Heating Up

With delayed economic data now back in focus, the market is also pricing in more clarity on Fed policy. Fed Chair Powell cut rates by 25 basis points last month but has urged caution amid limited data. Still, 80% of economists in a Reuters poll expect another quarter-point cut in December, with traders citing weakening growth indicators and resilient physical demand for gold and silver as tailwinds.

Lower interest rates reduce the opportunity cost of holding gold and typically act as a bullish catalyst — particularly in an environment where growth and fiscal responsibility are both under pressure.

Gold Price Forecast: Bullish Above $4192.36, Bearish Below $4133.95

As long as spot gold holds above $4192.36, the bias remains bullish, with scope to retest the October 20 record high at $4381.44. However, a failure to sustain this breakout — especially a move back below $4133.95 — would suggest a short-term top is in place and could trigger a deeper correction toward the $3929.58 level.

Eyes now turn to upcoming jobs and inflation reports, which could confirm whether the Fed has the green light to cut again. Until then, gold’s bullish tone remains intact.

More Information in our Economic Calendar.