XAU/USD. Price Analysis. Forecast. Gold Rebounds Amid U.S. Dollar Weakness

[Ben Graham]

On Friday, gold attracted buyers amid expectations that the U.S. Federal Reserve will cut borrowing costs two more times this year.

Fed Chair Jerome Powell did not provide any new policy signals, but the minutes of the FOMC's September meeting, released Wednesday, confirmed ongoing concerns about inflation. Despite this, traders still largely expect two additional rate cuts by the Fed before the end of the year.

The U.S. government shutdown continues into its second week, with no progress on a funding agreement. On Thursday, the Senate rejected competing budget proposals for the seventh time and does not plan further votes until next week, when the upper chamber is expected to resume work on Tuesday.

Also on Thursday, U.S. President Donald Trump stated that Washington and its NATO allies are increasing pressure on Russia in an effort to end the conflict in Ukraine. Early Friday morning and into Saturday, Ukraine reported a large-scale Russian attack on Kyiv involving ballistic missiles and drones targeting critical infrastructure, causing significant power outages.

These developments sustain a high level of geopolitical risk and largely offset any optimism stemming from the first phase of the peace plan between Israel and Hamas regarding Gaza.

Additionally, moderate weakening of the U.S. dollar contributes to strengthening prices for precious metals, which appear poised for an eighth consecutive week of gains driven by favorable fundamental factors.

Technical Outlook

From a technical perspective, the current rise above the psychological level of $4000 faces initial resistance near $4035, ahead of the historical high in the $4059–4060 range reached on Wednesday. Continued buying above the historic high can be interpreted as a new catalyst for bulls, potentially pushing gold prices toward the round level of $4100.

On the downside, bears would need to wait for sustained selling pressure below the $3944 level before preparing for a more pronounced decline.

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