Gold (XAUUSD) Price Forecast: Bulls Watching Powell and Xi as Trade War Fears Grow

Rate Cut Bets and Risk-Off Flows Extend Bullish Run

Gold logged its eighth straight weekly gain, propelled by broad-based fundamental support including dovish Fed expectations, rising geopolitical risk, and resilient demand from central banks and ETF inflows. The uptrend remains anchored by a weakening growth outlook and rising uncertainty across major global economies.

Last week, Gold (XAU/USD) settled at $4016.68, up $130.23 or +3.35%.

Fed Cut Odds Cemented as Data Blackout Continues

With the U.S. government shutdown now entering a third week, critical economic data releases like the September jobs report and CPI have been delayed. That vacuum has elevated the importance of Fed commentary in setting expectations. As of Friday, futures markets priced in a 95% chance of a rate cut at the October meeting and are leaning toward another cut by year-end.

Fed officials continue to walk a fine line. While Kansas City’s Schmid dismissed the need for more easing, recent comments from Governor Waller and NY Fed’s Williams show openness to policy flexibility amid labor market softening. Powell’s remarks on Tuesday will be closely watched as the last major policy signal before the October 28–29 FOMC meeting.

Geopolitical Unrest and Fresh Trade War Risk Fuel Safe-Haven Bid

Political instability abroad added a fresh tailwind to gold. In Europe, France is still without a confirmed prime minister, stalling budget talks and spooking investors. In Japan, the yen slumped after the pro-stimulus candidate Sanae Takaichi secured party leadership, dragging down rate hike odds and lifting gold in yen terms.

Late in the week, former President Donald Trump reignited U.S.–China trade tensions by proposing sweeping new tariffs on Chinese imports and publicly rejecting talks with President Xi.

This announcement, dropped Friday via Truth Social, adds a new layer of geopolitical uncertainty that’s likely to drive positioning into the new week. With equity markets already on edge and the dollar slipping, the potential for renewed trade friction is being treated as a tail risk for global growth—and a fresh catalyst for safe-haven flows.

Central Bank Buying and ETF Inflows Reinforce Structural Bid

China’s central bank added to its reserves for the 11th consecutive month, while ETF inflows continue to build. Persistent central bank accumulation, combined with institutional demand, suggests deeper hedging against economic and policy instability is underway.

UBS and Goldman Sachs have both raised long-term gold forecasts, citing a weaker dollar, fiscal stress, and declining confidence in traditional safe-haven instruments. These flows are providing a strong floor beneath the market regardless of short-term volatility.

Gold Price Forecast: Risk Calendar and Policy Headwinds Favor Further Upside

Looking ahead, this week’s calendar features a critical appearance from Fed Chair Jerome Powell on Tuesday and the rescheduled CPI report on Friday, both of which will shape rate cut probabilities heading into the October FOMC meeting. Without hard data, traders will be forced to extrapolate from tone and guidance—particularly around labor market softness and inflation stickiness.

Powell’s language will be scrutinized for signs the Fed is preparing to shift from data-dependence to risk management. Any acknowledgment of policy asymmetry (i.e. cuts being easier than hikes) will reinforce gold’s current tailwind. Likewise, if CPI shows any downside surprise—particularly in the core figure—that will likely accelerate the market’s timeline for additional cuts.

Markets will also be watching for further reaction to Trump’s tariff threat. If rhetoric escalates or China responds, safe-haven demand could deepen, especially with broader political dysfunction in the U.S. and Europe already in play.

Overall, the fundamental bias for gold remains bullish this week. Rate cut expectations are well-entrenched, central banks are buying, geopolitical risk is rising, and there’s no clean resolution on the fiscal or political front in any major economy. The only meaningful threat to the gold bid would be a surprise hawkish turn from Powell or a hotter-than-expected CPI—both low-probability outcomes given current conditions.

Weekly Technical Outlook: Topping Risk Within Bullish Trend

Gold closed last week at $4016.68, marking its eighth straight weekly gain and extending a rally that now falls inside the 7–10 week window where short-term tops typically form. A weekly close below $4016.68 would confirm a weekly closing price reversal top, opening the door to a 2–3 week correction. That move would likely be tactical—not a change in primary trend—unless backed by a material shift in fundamentals.

Momentum holds as long as the market stays above last week’s low at $3884.11. A break beneath that level would form a minor top and shift the short-term tone bearish. On the flip side, a breakout above the $4059.35 high would reaffirm the broader uptrend and push gold into fresh discovery territory, with psychological levels like $4100 and $4200 back in play.

Until a confirmed reversal develops, the technical bias remains bullish—but stretched. Traders should stay alert to any shift in tone from Powell or CPI-driven repricing that could catalyze a near-term pause or shakeout.

More Information in our Economic Calendar.