Gold (XAUUSD) Price Forecast: Will Bulls Clear $3791.26 or Fade Before Jobs Data?

Gold Rally Stalls Just Below Record High — Will the Fed Fuel the Next Leg?

Gold traders had a lot to chew on heading into the weekend. Spot gold closed higher on Friday, but not quite strong enough to retest Tuesday’s record high at $3791.26. Still, it was a solid week for bulls — XAU/USD gained 2.03% and continues to look supported by a growing chorus of rate-cut bets, even as the data picture remains mixed.

So, what’s really driving gold right now? Let’s dig in.

Fed Rate Cut Bets Stay Alive — But So Does the Economy

Friday’s PCE inflation data — the Fed’s preferred measure — came in exactly as expected. Core PCE rose 0.2% month-over-month and 2.9% year-over-year in August. That’s still well above the Fed’s 2% goal, but in line with what markets had priced in.

Add in a surprise uptick in personal income and spending, and you’ve got a data set that keeps both sides of the gold trade interested. For now, the takeaway is this: the Fed has room to cut, but not urgency. Traders are still pricing in an 88% chance of a 25 bp cut in October and a 65% chance of another one in December, per CME’s FedWatch Tool.

That’s keeping gold bid — but not breaking out.

Dollar Still Resilient Despite Friday Dip

The U.S. dollar took a small step back Friday but not enough to reverse its weekly gain. DXY finished at 98.182, slightly down on the day but still locked into a two-week winning streak.

Stronger-than-expected GDP growth (3.8% vs. 3.3% forecast) and lower jobless claims (218K vs. 235K expected) suggest the Fed may not be in a rush to ease policy — even if inflation appears contained.

This ongoing dollar strength is a headwind for gold, capping upside potential — at least for now.

Yields Steady as Traders Gauge Fed Timing

Treasury yields barely moved Friday. The 10-year held around 4.183%, while the 2-year slipped a couple of basis points to 3.645%. That tells us the bond market isn’t panicking — it’s just waiting. With inflation data on one side and solid growth and jobs numbers on the other, yields are reflecting uncertainty over when the Fed will finally blink.

And until yields start falling more decisively, gold may struggle to get that clean breakout above $3791.26.

Technical Picture: Breakout or Backtrack?

Technically, we’re still stuck in a range. Gold needs a clean break above $3791.26 to resume the uptrend and put $3879.64 in play. On the flip side, if we drop below minor support at $3709.61, the tone shifts bearish fast — putting $3627.96 and $3612.83 back in focus.

So, Where’s Gold Headed Next?

Short term, the gold price outlook leans neutral-to-bullish — but that depends on how the next round of Fed commentary and jobs data shake out. A clean break above $3791.26 opens the door for a push toward $3879.64, especially if rate cut bets hold or strengthen.

But if yields or the dollar catch another tailwind, don’t be surprised if gold pulls back toward $3709.61 or even tests those lower minor bottoms. Next week’s labor data could be the catalyst. Stay nimble.

More Information in our Economic Calendar.