Gold price prediction: XAU nears $3,900 on Fed signals and shutdown risk
Gold climbed to $3,860 per ounce on Friday, heading for a seventh straight weekly gain, as investors sought safety amid a U.S. government shutdown and dovish expectations for Federal Reserve policy. The metal’s rally underscores its dual role as a hedge against both political turmoil and softer macroeconomic signals.
Highlights
- Gold trades near $3,860, on track for its seventh consecutive weekly gain.
- Shutdown delays payroll data, bolstering dovish Fed expectations and safe-haven demand.
- Break above $3,880–$3,900 could extend gains toward $3,950, with strong support at $3,807–$3,742.
Gold remains firmly within a rising channel that has shaped its advance since late August. On the 4-hour chart, immediate support is anchored at $3,850 near the 20-period EMA, while deeper cushions lie at $3,807 and $3,742, aligned with the 50- and 100-period EMAs. Resistance stands at $3,880 and the psychological $3,900 zone, which has already been tested this week.
XAU price dynamics (Source: TradingView)
Momentum indicators reflect strength with moderation. The RSI sits at 57, cooling from earlier overbought levels. This suggests the metal may pause in consolidation before another attempt higher, though the overall structure remains bullish.
Macro drivers
The U.S. government shutdown has reinforced safe-haven demand by halting critical economic data releases, including September’s payrolls report. With weekly jobless claims also delayed, markets turned to private-sector measures, which signaled softening labor conditions. ADP data showed consecutive declines for the first time since 2020, while JOLTS and Challenger reports pointed to weaker hiring activity.
These developments strengthened expectations that the Fed could deliver two rate cuts before year-end. Although Dallas Fed President Lorie Logan urged caution on aggressive easing, the market remains tilted toward dovishness. This shift has pressured the dollar and U.S. Treasury yields, directly boosting gold’s relative appeal.
Outlook
If gold clears the $3,880–$3,900 zone with conviction, it could target $3,920–$3,950 in the near term. A pullback to $3,850 would not alter the broader bullish bias, with trend support holding firm above $3,742. The macro backdrop continues to favor safe-haven flows unless U.S. policymakers restore confidence or Fed officials push back more strongly against rate cut bets.
In recent coverage, we highlighted how gold’s resilience was rooted in both safe-haven positioning and supply-demand dynamics. That outlook remains valid, with the current rally showing strong alignment between technical and macro drivers. Unless external shocks shift the narrative, gold’s trajectory continues to point higher into October.
Latest XAU/USD News
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