XAU/USD. Analysis and Forecast

[Redator]

Today, gold set another all-time high, moving toward the next psychological level of $4,100, supported by a strong fundamental backdrop.

Investor sentiment toward risk assets deteriorated sharply late last week after President Trump threatened to impose 100% tariffs on Chinese goods and tighten export controls on key software starting November 1. Beijing responded by criticizing Washington for its "double standards" and hinted at unspecified countermeasures should the U.S. threats be implemented, stressing that it is not afraid of a potential trade war.

However, over the weekend, Trump softened his rhetoric, stating on Truth Social that the U.S. is not interested in harming China's economy, and that both sides aim to avoid economic losses. Despite this, the renewed tension raises doubts about the possibility of a Trump–Xi Jinping meeting later this year, which helped push gold prices to new record highs on Monday.

Meanwhile, the U.S. government shutdown is likely to drag on, as Congress still fails to reach an agreement on a funding plan. A Senate vote is scheduled only for Tuesday, and House leaders have signaled no willingness to compromise with the opposition. Trump has blamed Democrats for the furlough of thousands of federal employees, who received formal notifications on Friday.

While aboard Air Force One, President Trump also warned of the possible delivery of Tomahawk long-range missiles to Ukraine if Russia does not end the conflict, emphasizing that such a move would mark a new stage of aggression. Moscow, in turn, warned Kyiv against receiving the missiles. This situation further fuels geopolitical tensions and boosts gold's appeal as a safe-haven asset.

According to CME FedWatch data, the probability of a 25 basis-point Federal Reserve rate cut in October and December is currently estimated at 96% and 87%, respectively. This strengthens the bullish outlook for gold, driven by reduced demand for the U.S. dollar and low liquidity due to a bank holiday in the U.S.

From a technical perspective, Friday's rebound from the $3,944 level and the uptrend support line, which coincides with the 9-day EMA, favors the bulls. However, overbought oscillators on the daily chart suggest the potential for short-term consolidation or a minor pullback before the next leg higher.

Any corrective decline below the $4,035–4,025 level is likely to attract new buyers near the $4,000 psychological level, helping to limit downward pressure toward the 9-day EMA, which aligns with the ascending channel support near $3,970. A decisive break below this line, however, would trigger technical selling, opening the way toward the $3,900 round level.

The material has been provided by InstaForex Company - www.instaforex.com