Insights 
VT 
Key Points:
- XAU/USD trades at $3,705.37, up 0.56%, nearing last week’s record of $3,707.40.
- Traders are pricing in 44bps of Fed cuts by year-end, but the dollar steadied near 97.81.
- Core PCE data due Friday is expected to show 2.9% annual inflation, keeping the Fed in focus.
Gold prices climbed early Monday, nearing record territory once more as spot gold touched $3,705.37 per ounce, just shy of last week’s all-time high of $3,707.40.
The 0.56% gain reflects both technical strength and a renewed wave of safe-haven demand following global political and monetary jitters.
Markets remain in wait-and-see mode after the Federal Reserve’s recent rate cut. While policymakers indicated further easing ahead, the measured tone has left traders seeking confirmation.
Fed funds futures now price in 44 basis points of additional cuts by year-end, spread across the two remaining policy meetings.
Despite this dovish backdrop, the dollar has managed to stabilise. The USDX index was last seen at 97.814, up 0.09%, with much of its recent downside momentum having slowed since July.
Our research desk noted that while a slower easing cycle should weigh on the dollar, the greenback short trade is becoming crowded, limiting further downside.
Political Crosswinds Keep Risk Appetite Capped
Asian equities drifted higher, but caution lingered. Trump’s proposal to impose a $100,000 fee on new H-1B visa applicants spooked Indian tech markets, with Nifty and Sensex dipping in response.
The move also rekindled tensions with China and India, both key sources of skilled US labour. Add to that the prior tariff hike to 50% on Indian imports and there’s plenty for investors to worry about.
These global frictions, combined with uncertainty around the Fed’s inflation trajectory, have kept investors defensive, creating ideal conditions for gold to shine.
Meanwhile, China’s markets remained choppy, despite positive signals from US–China discussions over TikTok.
Equities in Taiwan hit a fresh record high, but momentum remained mixed across the region.
Technical Overview
Gold (XAUUSD) is trading at $3,705.37, up 0.56% on the day, as bullish momentum continues to strengthen. Since bottoming out near $2,832.68 in March, gold has staged a steady recovery, with a breakout above the $3,600 resistance confirming the uptrend.
The moving averages remain firmly aligned to the upside, and the MACD shows widening bullish momentum, signalling that buyers still dominate the market.
The next key resistance is seen at $3,750–3,800, where profit-taking could emerge. On the downside, initial support lies at $3,600, followed by stronger levels near $3,327, which has acted as a base during recent consolidations.
A sustained break above $3,800 could open the door toward $4,000, while a failure to hold above $3,600 risks a deeper pullback.
Cautious Forecast
In the short term, gold is likely to test the $3,710 level again, with bullish momentum building ahead of Friday’s US PCE inflation data. If the core PCE figure prints at or below 0.2% m/m as expected, the Fed will have more breathing room, likely supporting further gains in bullion.
In the medium term, gold’s outlook hinges on the path of the dollar and Treasury yields. If cross-border tensions persist and the Fed holds its dovish tone, gold could march into new highs above $3,750.
However, a stronger-than-expected inflation print or hawkish Fed remarks could trigger a pullback toward the $3,650–3,600 support zone.
