Gold (XAUUSD) Price Forecast: Fed Cut Bets Lift Gold Price as Bulls Drive the Gold Rally

Gold Price Rally Extends as Fed Cut Bets Surge

Spot Gold (XAUUSD) closed at $4,215.82 on Friday, up $57.02, and traders were quick to lean into the move. It’s the strongest finish since November 13, supported by a 3.71% weekly gain and a fourth straight monthly advance. The broader message here is that gold keeps attracting buyers whenever the market leans harder into a dovish Fed stance, and this week delivered plenty of fuel.

Rate Expectations Flip the Script for Bulls

Cut odds for the December 9–10 meeting now sit near 87%, up sharply from 50% just a week earlier. That shift — driven by dovish remarks from Waller and Williams and a softer run of economic data after the government shutdown — has given traders confidence that easier policy is coming into focus.

Bart Melek at TD Securities noted that expectations for a slowing economy into 2026 are pulling investors back into bullion, reinforcing the idea that lower rates continue to favor non-yielding assets like gold. Traders weren’t shy about expressing that view through Friday’s buy interest.

Gold Market Gets Tailwind From a Softer Dollar

The dollar index settled at 99.479 on Friday, extending its weekly decline to 0.72%. It wasn’t a large move, but in a week where the rate narrative shifted decisively, even a modest dollar pullback added support.

Eric Theoret at Scotiabank pointed to the run of recent data and said it “definitely leaned toward a cut,” and FX markets traded that way throughout the week. For gold, a weaker dollar keeps international demand steady and helps extend rallies that already have momentum behind them.

Yields Edge Up, but Buyers Stick With the Gold Rally

Treasury yields moved slightly higher on Friday — the 10-year at 4.017% and the 2-year at 3.497% — yet the uptick didn’t dent enthusiasm for gold. With the Fed entering its blackout period, traders know there won’t be fresh commentary to challenge the market’s conviction. That shifts attention to next week’s PCE release, which now stands as the next decisive input for rate expectations.

Gold Price Forecast: Bulls Hold the Edge Into PCE

Bias stays bullish heading into the data. As long as traders expect a December cut, dips should continue to draw buyers. A softer PCE print could extend the rally, especially if the dollar remains soft. The risk comes from any upside inflation surprise, which could trigger swift profit-taking after a strong week — but for now, the market looks comfortable staying long gold.

More Information in our Economic Calendar.