Gold (XAUUSD) Price Forecast: Fed Cuts, CPI Data and Safe-Haven Flows Target $3,879

Gold Rally Extends as Fundamentals Back Technical Targets

Gold prices traded at $3,652.98 on Tuesday, keeping momentum toward the swing chart target of $3,879.64 due September 23. The breakout above the previous record high at $3,500.20 launched the rally, but sustaining the move will depend on whether Fed policy, inflation data, and global safe-haven flows continue to align in gold’s favor.

Fed Rate Cut Bets Boost Gold — But For How Long?

Markets are pricing in an 88% chance of a 25-basis-point cut at the September 17 FOMC meeting, with slim odds for a larger 50-point move. Easier policy would typically weaken the dollar and enhance gold’s appeal as a non-yielding asset. However, this relationship is not guaranteed. If other central banks cut rates aggressively or if U.S. assets continue to offer relative safety, the dollar could remain firm, limiting gold’s upside even in a Fed easing cycle.

Yields Send Mixed Signals

The U.S. 10-year Treasury yield has slipped to 4.05% from January’s 4.8% peak, reflecting growth concerns and boosting safe-haven demand. Lower yields reduce the cost of holding gold, supporting prices in the short term. By contrast, long-dated yields in Europe and Japan are rising sharply on debt and political risks, creating uncertainty in global bond markets. Traders view falling U.S. yields as bullish for bullion now, while elevated foreign yields highlight broader fiscal stress that also encourages diversification into hard assets.

Jobs Data Raises Questions, Not Certainty

The weak August payrolls report — only 22,000 jobs added and unemployment at 4.3% — has fueled bets on Fed cuts. Still, one month of disappointing data doesn’t guarantee a policy pivot. Fed officials remain focused on both inflation and employment, meaning Thursday’s CPI release, just days before the FOMC meeting, could prove decisive. A hotter-than-expected print would make it harder for the Fed to justify aggressive easing and could temporarily cool gold’s momentum.

Safe-Haven Demand in Focus

Investors are steadily rotating out of bonds and into bullion as a preferred hedge against fiscal and political uncertainty. Gold’s advantage as a physical asset, free from default or policy interference, has added to its appeal. Still, if the Fed opts for a slower pace of cuts or signals caution on inflation, some buyers may step back, testing how well gold can hold above key levels.

Forecast: Upside With Caveats

The swing chart points to $3,879.64 by September 23, aligning with the momentum from the breakout above $3,500.20. That breakout level now stands as the most credible support, in line with the old market adage: “old tops become new bottoms.” A sustained move below $3,500.20 would undermine the bullish case and suggest traders are reassessing the rally. For now, with weaker U.S. yields, safe-haven flows, and expectations of Fed easing all in play, gold’s rally looks supported — but not without meaningful risks.

More Information in our Economic Calendar.