Gold (XAUUSD) Price Forecast: Traders Eye $3,700 as Bullish Gold Market Accelerates

Gold Soars to All-Time High as Fed Rate Cut Bets Gain Momentum

Gold surged to a new all-time high of $3,622.50 on Monday, extending its record-breaking rally as traders aggressively priced in a Federal Reserve rate cut following softer U.S. labor data. With no resistance levels above current prices and minor support at $3,511.75, bullion continues to benefit from a weakening dollar, subdued Treasury yields, and growing geopolitical risks.

At 13:04 GMT, XAU/USD is trading $3626.02, up $39.47 or +1.10%.

Fed Rate Cut Bets Surge on Weak Jobs and QCEW Risks

U.S. nonfarm payrolls showed sharply slower job growth in August, pushing the unemployment rate to a nearly four-year high of 4.3%. Traders responded by pricing in an 88% probability of a 25-basis-point cut at the Fed’s upcoming meeting, with a 10% chance of a larger 50-basis-point move, according to CME FedWatch.

But attention is now shifting to Tuesday’s release of the Quarterly Census of Employment and Wages (QCEW), which could revise job growth figures downward by as much as 1 million from April 2024 to March 2025. The QCEW, which draws on state unemployment insurance records, is widely regarded as the most accurate gauge of U.S. employment. A sharp revision lower would reinforce the case for aggressive rate cuts and rattle confidence in prior labor strength.

Treasury Yields Ease as Inflation Data Looms

Treasury yields held near multi-month lows, with the 10-year at 4.07% and the 2-year down to 3.497%. The pullback reflects growing anticipation of Fed policy easing and comes ahead of Wednesday’s PPI and Thursday’s CPI, which are expected to confirm a cooling inflation trend. Deutsche Bank noted Thursday’s core CPI reading will be critical for shaping expectations, especially given the Fed’s current media blackout.

Central Banks Keep Buying as Dollar Weakens

Gold’s rally is also underpinned by ongoing central bank demand. China’s central bank added to its reserves in August for the 10th straight month, reflecting a broader diversification away from the dollar. Meanwhile, the DXY index fell to 97.565, down 0.17% on Monday, following Friday’s sharp selloff after the jobs report. A weaker dollar enhances bullion’s appeal for foreign investors and removes a key headwind for price growth.

Gold Prices Forecast: Breakout Set to Extend

The technical setup remains bullish, with no immediate resistance above $3,622.50. The next psychological target sits at $3,700, a level UBS analysts expect by mid-next year. With U.S. yields retreating, QCEW revisions looming, and the Fed likely pivoting more dovishly, gold appears poised for further upside. Traders should remain long while support at $3,511.75 holds, watching for inflation data and QCEW revisions to guide the next leg.

Gold prices forecast: bullish. Dollar softness, central bank demand, and deepening Fed cut expectations continue to favor upside.

More Information in our Economic Calendar.