Gold Price Forecast - XAU/USD Price Near $3,611 as Support Holds $3,500 on Fed, Debt Fears

Gold Price (XAU/USD) Pushes Above $3,600 as Safe-Haven Demand Soars

Gold (XAU/USD) is holding firm at $3,611 per ounce after opening futures at $3,619.80, marking a 0.7% rise from Wednesday’s close at $3,593.20. The metal has surged 45.3% year-over-year, climbing from $2,490 in September 2024, and is now up 36% year-to-date. Momentum was fueled by investors hedging against inflation, fiscal stress, and political intervention in central banking. The rally has firmly positioned bullion as one of the most aggressive outperformers in 2025, eclipsing major equity benchmarks and rivaling cryptocurrencies.

Goldman Sachs Flags $5,000 Scenario Amid Fed Turmoil

Strategists at Goldman Sachs argue that if President Trump’s pressure on the Federal Reserve erodes its independence, capital flight from Treasuries could ignite a historic move in XAU/USD. Their “tail-risk” model points to $4,500, with a 1% reallocation of Treasury holdings capable of driving gold toward $5,000 per ounce. At present, gold ETFs represent just 1% of the Treasury market’s size. If even a sliver of bond capital rotates into bullion, the demand shock could break records. Current spot stands at $3,596 on Comex, with traders placing a 98% probability on a September Fed rate cut, further enhancing the non-yielding asset’s appeal.

Central Bank Buying Intensifies, Dollar Weakens

The rise is not retail-led alone. Global central banks have been net buyers, reducing exposure to dollar-denominated assets amid $37 trillion in U.S. government debt and an annual interest bill nearing $1 trillion. Gold now accounts for about 20% of global central bank reserves, surpassing the euro. The U.S. Dollar Index has slipped to 95.63, showing a –0.25 correlation with gold, its weakest in two years. This negative relationship amplifies bullion’s upside as the dollar weakens under debt concerns and tariff-driven inflation.

Metals Exploration PLC (LSE:MTL) Shows Earnings Divergence Despite Higher Gold

While the global narrative is bullish, gold miners are experiencing mixed results. Metals Exploration PLC (MTL), focused on operations in the Philippines and Nicaragua, reported interim revenue of $118.9 million, up 31% year-on-year, thanks to gold averaging $2,884 per ounce versus $2,190 last year. However, pretax profit plunged 71% to $16.8 million due to a sharp drop in impairment gains and a spike in other expenses to $18.8 million. Operating profit still more than doubled to $29.1 million, while free cash flow hit a record $70.7 million. Shares fell 2.1% to 12.64 pence in London trading, highlighting the volatility miners face even with bullion at historic highs.

Technical Outlook: $3,500 as Support, $3,700 Resistance

Chart watchers view $3,500 as the critical support zone for XAU/USD, a level tested during Thursday’s session before rebounding. Analysts highlight $3,700 as the next breakout threshold, aligning with Goldman Sachs’ near-term year-end projection. RSI remains elevated, suggesting strong momentum but leaving room for corrective pullbacks. Traders are monitoring U.S. nonfarm payrolls closely, with weak labor data likely to provide the next impulse higher. Any breach below $3,500 could trigger quick tests of $3,450, but dips remain aggressively bought.

Philippines Gold Price Trends Show Global Translation

Local data shows how international bullion rallies ripple into emerging markets. In the Philippines, gold prices slipped slightly to PHP 6,495.52 per gram from PHP 6,544.82 the day before, translating international prices into peso terms. A troy ounce cost PHP 202,033.50, reflecting minor currency-driven fluctuations but broadly aligned with the global rise above $3,600.

Macro Drivers: Debt Burden and Tariff Risks

U.S. government debt at 126% of GDP and political tension over the Fed have become primary catalysts for bullion demand. Trump’s firing of Fed Governor Lisa Cook and open criticism of Jerome Powell sparked renewed doubts about the Fed’s autonomy. Fiscal deficits—spending $7 trillion against $5 trillion in revenue—are forcing bond issuance at a time when investors are questioning Treasuries as reliable stores of value. Tariff battles have added further uncertainty, pushing global investors to diversify into gold.

Long-Term Institutional Shifts Reinforce the Rally

Billionaire hedge fund managers like Ray Dalio argue that the U.S. is facing 1930s-style political and fiscal risks, making gold indispensable as a store of value. ETF assets are surging, and bullion now challenges Treasuries as a reserve hedge. Bridgewater and other funds have been reallocating capital toward metals, underscoring that this rally is not a speculative flash but a structural shift.

That's TradingNEWS