Gold (XAU/USD) Technical: Overbought but bullish trend remains intact

[Ben Graham]

This is a follow-up analysis and an update of our prior publication, “Gold (XAU/USD) Technical: Bullish acceleration supported rising implied volatility”, published on 2 September 2025.

The precious yellow metal has staged the expected bullish breakout above its former all-time high of US$3,500 printed on 22 April 2025. Gold (XAU/USD) rallied by 5.3% to hit a current fresh intraday record high of US$3,655 at the time of writing.

Lower opportunity costs reinforced the current bullish acceleration phase of Gold

Fig. 1: 10-YR US Treasury real yield major trend with Gold (XAU/USD) as of 9 Sep 2025 (Source: TradingView).

Gold (XAU/USD), as a non-interest-bearing asset, tends to benefit in lower-rate environments. A decline in interest rates reduces the opportunity cost of holding gold, thereby supporting stronger demand.

This dynamic can reinforce bullish momentum, potentially creating a positive feedback loop that drives further price appreciation.

Since Fed Chair Powell’s dovish speech at Jackson Hole on 22 August, the 10-year US Treasury real yield (stripping out 10-year inflation expectations derived from the 10-year US Treasury inflation-protected bond) has declined by 19 basis points (bps) to a current level of 1.66% from 1.85% (see Fig. 1).

Let’s now examine Gold (XAU/USD)’s latest short-term (1 to 3 days) trajectory and key technical levels to watch.

Fig. 2: Gold (XAU/USD) minor trend as of 9 Sep 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Maintain bullish bias with a key short-term pivotal support at US$3,600 for Gold (XAU/USD). Minor bullish impulsive up move sequence is likely in progress, and a clearance above US$3,670 sees the next intermediate resistances coming in at US$3,697 and US$3,725 (Fibonacci extension cluster) (see Fig. 2).

Key elements

• The current price actions of Gold (XAU/USD) in place since the 29 August 2025 low of US$3,404, are classified as a bullish acceleration movement depicted by a steeper minor ascending channel.
• The lower boundary of the steeper minor ascending channel confluences closely with the US$3,500 key short-term pivotal support.
• The hourly RSI momentum indicator has managed to find support at its parallel ascending support after it exited from its overbought zone in today’s Asia session (9 September).

Alternative trend bias (1 to 3 days)

A break below the US$3,600 key short-term support on Gold (XAU/USD) invalidates the bullish tone to trigger a deeper minor corrective decline towards the next intermediate supports at US$3,561 and US$3,536.

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