Gold Prepares for Giant Leap. Forecast as of 29.08.2025
The US’s intention to pursue fiscal dominance has created tailwinds for XAUUSD quotes. Meanwhile, investors are expecting the Fed to cut rates and the US economy to slip into stagflation. Let’s discuss this topic and make a trading plan for gold.
The article covers the following subjects:
Major Takeaways
- Gold is rising on expectations of a Fed rate cut.
- Geopolitical factors continue to support the XAUUSD.
- Rising stagflation risks buoy the precious metal.
- Gold purchases are relevant with targets at $3,500 and $3,560.
Weekly Fundamental Forecast for Gold
Gold languished in the medium-term consolidation range of $3,250–$3,400 for a very long time. The precious metal gathered strength, steadfastly endured hardships, and prepared for an attack. Its patience was rewarded. The current favorable environment creates an ideal opportunity for a rally in the XAUUSD.
No matter how much Donald Trump wants to boost the economy, the markets are talking about stagflation. The 30-year Treasury bond yields rose in response to the news that the US leader had fired FOMC member Lisa Cook. This indicates high risks of inflation acceleration in the future. At the same time, 5-year Treasuries fell amid an 85% increase in the chances of the Fed resuming its monetary expansion cycle in September. The yield curve has risen, which is excellent news for XAUUSD bulls.
US Yield Curve
Source: Bloomberg.
Gold prices exhibited elevated volatility in response to the recent meeting between the US and Russian presidents in Alaska. This could potentially end the conflict in Ukraine and deprive the XAUUSD of its key drivers. The strategic shift by central banks toward de-dollarization and diversification of reserves into precious metals during 2022–2025 led to a significant surge, culminating in a historic peak in April. However, the breakthrough in negotiations did not happen. Moscow is not making concessions, and Donald Trump is talking about a global trade war. Against this backdrop, demand for safe-haven assets will likely rise.
The US administration’s intention to reshape the world trade and gain control over financial markets by taking the Fed under its wing has spurred gold prices. The precious metal has embarked on an upward trajectory, posting gains during the past four out of the last five weeks, and Christopher Waller’s dovish rhetoric has been a contributing factor.
Gold’s Weekly Performance
Source: Bloomberg.
According to the leading candidate for Fed chair, the US regulator’s decision at the September FOMC meeting will depend on the incoming data. Waller supports a 25 basis point cut. However, if the labor market continues to cool and inflation remains anchored, his stance may shift to a 50 basis point reduction.
Gold prices are likely to remain sensitive to developments in the Lisa Cook case. The FOMC member filed a lawsuit against Donald Trump, claiming that he terminated her employment illegally. The US president explained his decision, but the main point is that he wanted to reshuffle the FOMC to reduce rates, which poses a significant threat to the US economy. Lisa Cook’s legal defeat will establish a precedent, and other Fed officials may resign. As a result, there is a higher probability of aggressive monetary expansion, pushing gold prices higher.
Weekly XAUUSD Trading Plan
The XAUUSD quotes will likely continue to soar against a backdrop of looming stagflation, the Fed’s expected resumption of rate cuts, geopolitical risks, and the US’s pursuit of fiscal dominance. If gold consolidates above $3,400 per ounce, the rally may continue towards $3,500 and $3,560. The recommendation is to buy.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAUUSD in real time mode
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