Gold (XAUUSD) Price Forecast: Core PCE Data May Trigger Fresh Gold Breakout

Gold (XAUUSD) Price Forecast: Fed Cut Lifts Outlook as $3707.56 Resistance Holds

Spot gold (XAU/USD)closed the week higher for the fifth consecutive time, gaining 1.15% to settle at $3684.98. Prices remain just below the all-time high at $3707.56, with strong support from Fed policy shifts, structural macro risks, and solid physical demand. Despite some profit-taking midweek, the broader trend continues to favor the bulls as traders eye fresh highs.

Fed Policy Shift and Dovish Rhetoric Fuel Gold Rally

The Federal Reserve’s 25-basis-point rate cut to 4.00%–4.25% has reinforced the bullish case for gold. Although Chair Powell signaled caution, his emphasis on “risk management” suggests more flexibility, particularly with inflation still above target and labor market data softening. Futures markets now price in two additional cuts by year-end. Minneapolis Fed President Kashkari added to dovish expectations by stating that more cuts are likely.

Dollar and Yields Cap Near-Term Momentum

While long-term fundamentals remain constructive, a late-week rebound in the U.S. Dollar Index to 97.646 and rising Treasury yields (10-year at 4.131%, 30-year at 4.743%) limited upside momentum. These moves raise the opportunity cost of holding gold, though they have not altered the underlying bullish structure.

Gold Price Projections: Wall Street Targets Raised

Citi raised its 3-month gold price forecast to $3800, citing fiscal risks and fragile labor conditions. Deutsche Bank projects an average of $4000, pointing to continued central bank buying and investor demand. In India, physical premiums surged to a 10-month high despite record nominal prices, reflecting robust consumer interest.

Gold Price Forecast: Eyes on PCE Inflation and Sentiment Data

Markets are now focused on this Friday’s release of the Fed’s preferred inflation gauge—Core PCE—and the final September University of Michigan Consumer Sentiment Index. July’s core PCE rose to 2.9% year over year, the highest since February. The Fed expects inflation to stay above target through 2026, while sentiment data suggests rising consumer unease about inflation and jobs. If PCE remains elevated and sentiment deteriorates, expectations for further rate cuts may strengthen, supporting gold’s upside.

Market Outlook: Bullish Above Key Support

As long as gold holds above $3311.56, with weekly support the 52-week moving average at $3046.08, the bullish trend remains intact. A confirmed breakout above $3707.56 would open the door to $3800, $3900, and $4000. With inflation sticky and sentiment weakening, gold price projections continue to lean bullish. Traders should watch for upside continuation as macro conditions favor further gains in the gold market.

More Information in our Economic Calendar.