Gold (XAUUSD) Price Forecast: Fed Cut Hopes and Geopolitics Lift Gold, But Reversal Risk Grows

Gold Price Hits $4079.92 as Record Rally Extends — But Is a Reversal Near?

Spot gold (XAU/USD) surged to another record high on Monday, briefly touching $4079.92 after clearing last week’s top at $4059.35. While there’s no defined resistance at all-time highs, the chart is starting to raise red flags for short-term traders. The rally is technically overbought, and price action now shifts focus to reversal signals rather than upside targets.

At 10:26 GMT, XAU/USD is trading $4074.10, up $57.42 or +1.43%.

With Relative Strength Index readings around 80 and no clear resistance overhead, bulls remain in control — for now. But a higher-high, lower-close or closing price reversal top would suggest a short-term top is forming. A clean downside break through the newly formed minor bottom at $3944.43 would flip short-term momentum negative and could spark a deeper correction toward the 50-day moving average at $3606.80.

Trump’s Tariff Threats Send Safe-Haven Bids Into Gold and Silver

Gold’s latest breakout was fueled by renewed trade war fears after former President Trump announced 100% tariffs on Chinese imports and threatened fresh export controls starting November 1. The safe-haven bid extended into silver, which also hit a record high, while Bitcoin and equities faced pressure.

Trump later softened his tone, saying, “Don’t worry about China, it will all be fine!” on Truth Social. But the tariff threat hasn’t been retracted, keeping geopolitical risk firmly in play. UBS noted “ongoing strong investment and central bank demand” as tailwinds and sees upside to $4200. Meanwhile, Goldman Sachs warned that silver may face more volatility and downside risk than gold due to its industrial linkages.

Fed Rate Cuts in Play as Traders Eye October and December

Fed expectations are providing another layer of support. Markets are pricing in a 95% chance of a 25bps cut in October, and 79.8% for a second cut in December, according to FedWatch. Non-yielding gold has gained 53% year-to-date, supported by declining real yields and an aggressive central bank gold-buying trend.

Traders will be watching closely for fresh guidance from Fed Chair Jerome Powell, who is scheduled to speak Tuesday at the NABE annual meeting. Several other Fed officials are also due to comment this week, potentially impacting short-term rate expectations and dollar flows.

Gold Price Forecast: Bullish Bias Holds, But Watch for a Reversal Setup

The gold market remains in a strong bullish trend with momentum intact above $3944.43. However, technical signals suggest caution is warranted. If sellers step in with a reversal pattern near current highs, a correction toward $3606.80 becomes a real risk. For now, the bias is bullish — but traders should be watching the close closely for signs the rally may be running out of steam.

More Information in our Economic Calendar.