Gold Price Forecast: XAU/USD Rebounds as Bulls Defend Critical Support

Gold Technical Forecast: XAU/USD Weekly Trade Levels

Gold has responded sharply from a major support zone after extending the broader decline into the October open.
The rebound keeps the immediate focus on whether buyers can build on the recovery or whether selling pressure quickly re-emerges.
Bulls still face significant overhead resistance, with a stronger recovery needed to suggest a more meaningful low is in place.
A sustained break below support would expose the yearly low and reinforce the risk of another major leg lower in XAU/USD.
Resistance 4319, 4454, 4493-4533 (key)- Support 4104 (key), 3943, 3800

Gold has mounted a notable rebound after last week’s selloff drove XAU/USD into a major technical support zone, but the recovery has yet to confirm that a durable low is in place. The immediate focus is on whether buyers can hold above this threshold and extend the move into a broader recovery, or whether renewed selling pressure forces another test of the lows. With expectations for an October Fed hike still subdued but further tightening before year-end firmly in play, next week’s CPI report could prove decisive for Treasury yields, the dollar, and the next directional move in gold. Battle lines drawn on the XAU/USD weekly technical chart.

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Gold Price Chart – XAU/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In last week’s Gold Technical Forecast we noted that XAU/USD was, “approaching confluent support into the start of the month with major event risk on tap tomorrow- risk for possible inflection into this zone with the immediate short bias vulnerable while above. From a trading standpoint, the risk remains tilted to the downside while below 4319 with a break / weekly close below 4104 needed to fuel the next leg lower in price.” XAU/USD briefly registered an intraday low at 4066 before rebounding nearly 3.5% with the recovery keeping the focus on a larger reaction off this confluent support zone heading into next week.

Weekly support remains with the 78.6% retracement of the June advance at 4104. This level converges on the 2025 May trendline (red) next week and a break / weekly close below this zone would be needed to mark resumption of the March downtrend and threaten the next major leg of the decline. Subsequent support objectives rest at the yearly low at 3942 and the 2024 uptrend which converges on 3800 next week.

Weekly resistance remains unchanged at the objective yearly open at 4319 and is backed by the 52-week moving average, currently near 4454. Note that the upper parallel of the yearly downtrend converges on this level over the next few weeks. Ultimately, a breach / weekly close above the March low-week close (LWC) and the 2025 high close at 4493-4533 would be needed to suggest that a more significant low is in place and a larger trend reversal is underway.

Bottom line: Gold has responded to longer-term uptrend support, and price will need to stabilize above this level next week before bulls can assert another push here. From a trading standpoint, losses would need to be limited to 4103 IF price is heading for a larger rebound here with a weekly close above 4319 needed to suggest a more significant low is in place and fuel a test of the broader March downtrend.

The focus for gold next week shifts to the September U.S. Consumer Price Index (CPI) report, which could prove pivotal in shaping expectations for the Fed's next move. While the probability of an October rate hike has fallen below 20%, Fed funds futures continue to price more than an 85% chance of at least one increase before year-end, suggesting markets have pushed expectations for further tightening toward December. With recent inflation readings coming in softer than expected, a hotter CPI print could revive the prospect of an earlier move, fueling a rebound in Treasury yields and the U.S. dollar while pressuring gold. Conversely, further signs of moderating inflation could reinforce expectations for a more patient Fed, easing the opportunity cost of holding non-yielding bullion and providing support for gold prices. Stay nimble into the release and watch the weekly close for guidance. I’ll publish and updated Gold Short-term Outlook next week once we get further clarity on the near-term XAU/USD technical trade levels.

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--- Written by Michael Boutros, Senior Technical Strategist

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