Gold price forecast: XAU approaches $4,254 as rate cut odds hit 87%

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Highlights

- Gold reaches $4,254, the highest level in six weeks, as rate-cut odds climb to 87 percent.

- Price breaks above the 0.786 Fibonacci level and challenges a key descending trendline.

- Rising EMAs and strong RSI momentum show a healthy bullish structure backed by macro flows.

Dovish signals from Fed officials and a soft run of U.S. economic releases following the protracted government shutdown have fueled the latest rally, positioning gold for what could become its strongest annual performance since 1979. Investors are turning back to gold as a defensive asset amid shifting macro expectations. With U.S. data softening and policymaker tone turning more dovish, financial markets are increasingly preparing for earlier and deeper rate cuts. ETF inflows and persistent central-bank accumulation have added to the bid, creating a powerful macro-technical alignment as December begins.

Technical breakout builds as gold challenges major trendline

On the 4-hour chart, gold has surged through the 0.786 Fibonacci retracement near $4,275, a resistance shelf that capped multiple recovery attempts since mid-October. Price is now pressing into a descending trendline that has defined the two-month correction. A close above this trendline would mark a significant structural shift, signaling that gold may be ready to rejoin the broader uptrend that carried the metal to record levels earlier this year.

Gold price forecast (Source: TradingView)

Momentum indicators reinforce the bullish bias. RSI sits above 71, reflecting an accumulation-driven move rather than a purely speculative rally. Gold has a history of sustaining overbought readings during macro-driven breakouts, especially in periods where central banks play an outsized role in physical demand. Meanwhile, the rising EMA structure — with the 20-EMA at $4,186, the 50-EMA at $4,145, and the 100-EMA at $4,114 — forms a staircase pattern that confirms a steady uptrend. The 200-EMA near $4,060 remains a long-term anchor and a key reference point on deeper pullbacks.

The next major test lies in the $4,275–$4,300 region, which aligns the descending trendline with the upper Fibonacci zone. A breakout above $4,300 would open the path back to the October high at $4,381. Clearing that level would place gold into fresh price-discovery territory, where measured extensions point toward $4,450–$4,500 — zones that may attract momentum traders if the Federal Reserve delivers a more dovish statement next week.

Macro backdrop turns decisively supportive

Gold’s rally is being underpinned by a notable shift in global macro tone. The extended U.S. government shutdown contributed to softer recent data, triggering concerns about growth resilience. Combined with dovish commentary from Fed speakers, markets now view an early rate cut as increasingly likely.

Central-bank demand remains a dominant theme. Several reserve managers have accelerated gold accumulation through 2024, reinforcing bullion’s status as a hedge against policy uncertainty and geopolitical fragmentation. ETF flows have turned positive as well, adding another layer of demand that supports price at higher levels.

The upcoming economic data — including payrolls and PCE — could affect near-term volatility, but expectations for easing remain deeply entrenched. Unless incoming numbers sharply undermine the rate-cut narrative, dip buyers are likely to remain active. The structural floor sits near the 0.618 retracement at $4,119, followed by the major support zone around $4,002. A break below these levels appears unlikely unless the macro landscape shifts dramatically.

What comes next for gold

Gold now sits at a pivotal inflection point where macro conviction and technical momentum converge. A sustained break above $4,300 would shift the structure decisively back toward an uptrend, with $4,381 and $4,500 as the next major targets. If the Fed confirms market expectations next week, the tailwind behind gold could strengthen into early 2026.

Failure to clear resistance may trigger short-term consolidation, but as long as price holds above the rising EMAs, the broader bias remains upward.

Previously, we highlighted gold’s tightening structure and noted that a break above the $4,275 zone would be the key trigger for a renewed bullish cycle. The metal’s approach toward this level and its strongest reading in six weeks now reinforce that outlook.

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