Record High Breakout and Target Levels
Gold prices surged at the start of the week, breaking through the previous record of 3707.56 and confirming a bullish breakout. This move sets the stage for a potential climb toward the swing chart target of 3879.64. Although that level was originally projected to be reached by September 23, momentum has slowed slightly, meaning the advance could take longer to play out. The technical structure, however, remains firmly bullish, keeping 3879.64 as the next major upside objective.
Fed Outlook and Inflation Data in Focus
Last week’s 25-basis-point rate cut by the Federal Reserve, its first since December, has fueled optimism among gold bulls. Market pricing now suggests a 93 percent chance of another rate cut in October and an 81 percent probability of an additional cut in December. These expectations stem from easing inflation and a softening labour market. Traders are closely watching upcoming remarks from Fed Chair Jerome Powell and Friday’s core PCE inflation release, both of which could provide fresh momentum for gold.
ETF Flows Highlight Rising Investor Demand
Gold’s more than 40 percent rally this year was initially powered by strong central bank buying and solid Asian demand. Recently, however, Western investors have stepped up as well. Rising inflows into gold-backed ETFs reflect renewed appetite in these markets, according to UBS strategist Giovanni Staunovo. Expectations of further monetary easing and suppressed real yields are encouraging portfolio managers to shift more capital into gold.
Technical Structure Points Higher
The breakout above 3707.56 strengthens the bullish case, leaving little in the way of resistance until 3879.64. On the downside, immediate support is located at 3627.96 and 3612.83. A break below these levels could suggest waning momentum, though the broader uptrend would still remain intact unless deeper levels are tested.
Gold Price Forecast
The outlook for gold stays bullish, underpinned by supportive monetary policy, strong ETF demand, and a confirmed technical breakout. While the journey toward 3879.64 may take longer than initially expected, the structure of the rally suggests further upside is likely. Traders should keep a close eye on Powell’s comments and the upcoming inflation data, as these could provide the spark for gold’s next major advance.
