Gold Price Forecast: XAU/USD Hits Record Highs Amid Inflation and Fed Uncertainty

XAU/USD Breakout Extends to Ninth Consecutive Weekly Gain

Gold (XAU/USD) surged to an all-time high, marking its ninth straight week of gains, as traders embraced the metal’s momentum amid growing uncertainty in the global economy. The recent surge represents the largest single-week range ever recorded, with gold prices testing multi-year highs in both momentum and duration. However, the rally now faces signs of exhaustion, as traders prepare for critical U.S. inflation data and the upcoming Federal Reserve rate decision on October 29.

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Historic Surge Pushes Gold to New Extremes

The latest XAU/USD breakout underscores gold’s resilience as a safe-haven asset. After months of steady gains, prices skyrocketed beyond $4,000 per ounce, establishing new record levels. The rally was fueled by concerns over inflation persistence, geopolitical tensions, and market uncertainty surrounding the Fed’s policy outlook.

The move mirrors the strength seen in August 2020, when gold last recorded a similar multi-week winning streak. With momentum now at its highest since April 2006, traders are questioning whether the market is nearing an exhaustion point.

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Technical Analysis: Resistance and Support Levels to Watch

Gold’s technical picture shows a decisive breakout, yet the market’s extended range hints at a potential cooldown. According to the latest weekly chart analysis, key levels have emerged that could determine the next directional move.

Resistance Levels:

• $4,084 – $4,113: Key resistance zone

• $4,308: Crucial breakout confirmation level

• $4,583: Long-term resistance and potential next upside target

Support Levels:

• $3,859: First major support

• $3,782: Key pivot level for bullish continuation

• $3,666: Extended downside support in case of deeper correction

A weekly close above $4,308 could ignite another wave of accelerated gains, with targets around $4,492 to $4,553. Conversely, a drop below $3,859 could signal the start of a corrective pullback.

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Momentum Analysis: Bulls Still in Control but Nearing Fatigue

In the previous gold forecast, we highlighted that bulls remained in control as prices broke a multi-year uptrend, extending toward critical resistance levels. That prediction proved accurate, as gold rallied sharply into confluent uptrend resistance last Friday.

However, the extraordinary pace of this advance — the largest weekly range on record — suggests growing risk of exhaustion. Momentum indicators show overbought conditions similar to previous cycle peaks, indicating that a temporary consolidation or mild correction could occur before the next leg higher.

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U.S. Inflation Data and Fed Rate Decision: The Next Catalysts

All eyes are now on the upcoming September CPI release, a key indicator of U.S. inflation trends. A hotter-than-expected reading could reignite fears of prolonged inflation, potentially bolstering gold prices further as investors hedge against currency depreciation.

Meanwhile, the Federal Open Market Committee (FOMC) decision scheduled for October 29 will be pivotal. If the Fed signals a more dovish stance or hints at slower rate hikes, gold could extend its bullish run beyond $4,308. Conversely, any surprise hawkish tone might trigger a short-term correction as traders reassess interest rate expectations.

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Macro Factors: Geopolitics, Inflation, and Safe-Haven Demand

Beyond inflation and rate decisions, gold continues to draw strong safe-haven demand amid global instability.
Key drivers influencing gold’s trajectory include:

• Escalating U.S.–China trade tensions, raising global economic uncertainty.

• Ongoing U.S. government shutdown, affecting investor confidence.

• Volatile equity markets, prompting diversification into precious metals.

• Persistent inflation concerns, sustaining the metal’s appeal as a hedge.

Together, these factors reinforce the long-term bullish case for gold, even as short-term volatility remains elevated.

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Outlook: Cautious Optimism Amid Extreme Momentum

Despite the record-breaking rally, traders should remain cautiously optimistic. The broader uptrend remains intact, but overextension increases the risk of near-term pullbacks. Maintaining stops near $4,000 is advisable while watching for a decisive weekly close above $4,308 to confirm the continuation of the bullish cycle.

If gold sustains momentum, upside targets could stretch toward $4,583, marking another milestone in the metal’s historic climb. However, any dip below $3,859 may trigger a corrective phase, potentially testing $3,782 before resuming the uptrend.

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Key Takeaways for XAU/USD Traders

• Gold has logged nine consecutive weekly gains, reaching fresh all-time highs.

• Technical indicators suggest exhaustion risks but no confirmed reversal yet.

• Resistance stands at $4,084–$4,113, with breakout potential above $4,308.

• Support levels at $3,859 and $3,782 remain critical for bullish validation.

• Traders await U.S. CPI data and the Fed rate decision for directional clarity.

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Conclusion: Watching for Confirmation Before the Next Big Move

Gold’s unprecedented rally has reaffirmed its position as a cornerstone of market stability amid global economic uncertainty. While the trend remains bullish, traders should watch for signs of exhaustion and manage exposure carefully around key resistance levels.

The upcoming U.S. inflation data and FOMC meeting will likely dictate the next major move for XAU/USD. Until then, market participants should stay nimble, monitor weekly closes, and prepare for heightened volatility as gold’s historic rally enters a critical phase.

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