Gold Price Forecast - XAU/USD Breaks Records at $3,636, Fed Bets and Central Banks Drive Rally

Gold Price Analysis: XAU/USD Surges Beyond $3,600 to Fresh Records

XAU/USD Breaks Historic Levels Amid Fed Cut Bets

Gold (XAU/USD) surged above $3,636 per ounce, setting a new all-time high, as investors priced in a Federal Reserve rate cut at the upcoming September 16–17 meeting. Spot prices gained around 1.3%, while U.S. futures climbed to $3,676, confirming that bullion remains the standout performer in 2025. The move builds on last week’s high of $3,596, and cements gold’s position as one of the year’s best-performing assets with a 38% YTD gain, following a 27% rally in 2024.

The latest driver was the U.S. August nonfarm payrolls report, which revealed hiring slowed sharply while unemployment climbed to 4.3%, the highest since 2021. The soft data pushed Fed cut expectations to 88% odds of a 25 bps reduction and 12% for a deeper 50 bps cut, according to CME FedWatch. Lower rates cut the opportunity cost of holding gold, and the market reaction has been swift.

Technical Picture Shows Path Toward $3,700

Charts reflect a clean breakout. On the daily timeframe, XAU/USD has punched through the $3,600 psychological ceiling, a level tested and rejected multiple times in August. Momentum is strong, with RSI readings hovering in overbought territory but still showing room for extension. Traders are now targeting $3,700 as the next resistance, with interim levels at $3,655 and $3,675.

On shorter horizons, the 4-hour chart highlights support forming at $3,590–$3,600, turning former resistance into a floor. Any pullback is likely to attract dip buyers, with key retracement levels at $3,550. The breakout from the ascending triangle pattern that developed through late August points toward a measured move objective near $3,780, though this target may take weeks to materialize.

Central Banks Extend Relentless Gold Purchases

A major tailwind for gold has been persistent central bank demand. The People’s Bank of China (PBoC) added bullion for the 10th consecutive month, lifting reserves to 74.02 million ounces in August from 73.96 million in July. This incremental buying confirms Beijing’s strategic shift away from dollar assets amid heightened U.S.-China tensions.

Global central bank demand remains robust, accounting for a significant portion of physical flows. Analysts estimate official sector purchases contributed over 20% of net global demand this year. UBS projects gold to hit $3,700/oz by mid-2026, citing both rate dynamics and the geopolitical bid.

Geopolitical and Policy Risks Add to Bullion’s Appeal

The surge in gold is not purely monetary. Political risks have amplified safe-haven demand. Investors are watching the Supreme Court ruling on Trump’s tariffs and the case over his authority to remove Fed Governor Lisa Cook. Goldman Sachs warned that any damage to Fed independence could push gold to $5,000, as a modest reallocation of capital from Treasuries into bullion would dramatically alter flows.

Meanwhile, Europe faces political instability with France’s Prime Minister Francois Bayrou expected to lose a no-confidence vote. In Asia, Japan’s Prime Minister Shigeru Ishiba has already resigned, sending the Nikkei 225 higher on hopes of fiscal expansion but underscoring global political flux.

Macro Data and U.S. Treasury Auctions in Focus

The week ahead is packed with catalysts. U.S. jobs data will be revised Tuesday, followed by PPI on Wednesday and CPI on Thursday. Consensus expects CPI at 0.3% MoM and 2.9% YoY, a slight uptick from July, which would keep inflation above the Fed’s 2% target and complicate its rate path. Traders also face heavy Treasury issuance, with $3B, $10B, and $30B auctions testing demand at a time when bond markets have been under pressure.

Lower yields and a softer dollar have historically amplified gold’s rallies, and with the DXY index slipping below 103.5, bullion has gained an additional lift from currency weakness.

Gold Miners and Equity Impact

The rally is spilling into mining equities. Shares of New Found Gold (NFGC) surged after announcing a $212 million acquisition of Maritime Resources, combining assets in Newfoundland. i-80 Gold (IAUX) advanced as it commenced underground development at its Archimedes project, expected to deliver 100,000 oz annually over a decade. Even sovereign purchases are growing — El Salvador bought $50 million in gold, its first purchase since 1990, to diversify reserves away from the U.S. dollar.

Large-cap miners like Barrick Gold (GOLD) and Newmont (NEM) are also benefitting, with analysts noting improved leverage to bullion prices given cost inflation has stabilized.

Investor Strategy and Market Verdict

With XAU/USD at $3,636, gold remains in a decisive breakout. Upside targets cluster at $3,700 and $3,780, while strong support lies at $3,590 and $3,550. Central bank demand, a weaker dollar, political instability, and Fed policy expectations all align in favor of further gains. Risks remain tied to inflation surprises; a hotter-than-expected CPI could trigger a short-term pullback.

Based on the weight of data, gold is rated Buy. Dips below $3,600 represent tactical entries, with upside skewed toward $3,700+ in the near term and a possible $4,000 test by 2026 if Fed easing and geopolitical risks persist.

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