Key Takeaways
- Gold enters the week just under record highs after a 1.5 to 1.7 percent weekly rise, with 3,500 now the pivotal support zone.
- Immediate resistance sits at 3,673 to 3,675. Above it, 3,730 and 3,780 are the next upside waypoints. First supports are 3,608, 3,587, and 3,566 from Fibonacci retracements.
- Fed meets September 16 to 17 and is widely expected to cut 25 bp. The guidance on the path of cuts will drive dollar and yield direction, and by extension gold.
- August CPI ran 0.4 percent month over month and 2.9 percent year over year, which has not derailed cut expectations but may temper how dovish the Fed sounds.
- Positioning and flows stay supportive. CFTC net longs are in the 260k area and gold ETFs saw a third straight month of inflows in August. GLD holdings hover around the mid 970 tonne mark.
- Risk to the view: a stronger dollar and a hawkish-leaning Fed could pin gold in a 3,600 to 3,675 range and invite a test of 3,566 to 3,587 before buyers reassert.
Market Dynamics and Recent Performance
Gold started the week hovering near record territory after last week’s push to fresh highs, with spot prices fluctuating around 3,640 to 3,650 as Monday trade got underway. The metal printed an all-time peak near 3,674 earlier in the prior week and still closed that stretch with a gain of roughly 1.5 to 1.7 percent, supported by softer labor readings and expectations for the first Federal Reserve rate cut since December. A firmer dollar on Monday and some profit-taking created a mild headwind, yet the market tone remained resilient given the upcoming Fed decision on September 16 to 17.
Dollar and yields are the macro hinge. The U.S. Dollar Index is holding in the high 97s, fractionally firmer on Monday, while the 10-year Treasury yield sits near the low 4s on recent prints. That mix limits upside bursts intraday but is far from restrictive enough to flip the broader bullish narrative that has dominated September.
Positioning and flows continue to lean constructive. Speculative net longs in COMEX gold have expanded into the 260k area on the latest CFTC update, while physically backed gold ETFs posted a third straight month of net inflows in August, led by North America and Europe. GLD’s total gold held has ticked up into the mid 970 tonne region in recent days, reinforcing the idea that dips are being accumulated.
Technical and Fundamental Influences
The breakout above 3,500 earlier this month is the key structural shift. That level now acts as a primary demand zone. The immediate resistance band is clustered around last week’s high at 3,673 to 3,675 and the psychological 3,700 round number. A clean daily close above that shelf would expose 3,730 and then 3,780 as next upside magnets. On the downside, the first technical cushion aligns with Fibonacci pullbacks of the 3,500 to 3,674 leg. The 38.2 percent retrace sits near 3,608, the 50 percent near 3,587, and the 61.8 percent near 3,566. An intraday slip through those zones would likely test the breakout area near 3,500.
Last week’s surge briefly pushed daily RSI into the mid 70s, consistent with a strong trend that can consolidate sideways rather than sharply mean-revert. MACD on the daily and weekly time frames remains above the signal line, which typically favors shallow pullbacks followed by trend continuation as long as price holds above the breakout pivot.
The Fed meets Tuesday and Wednesday, with a 25 bp cut widely expected. The tone of the Statement, the Summary of Economic Projections, and Chair Powell’s Q&A will set the path for the dollar and front-end yields. August CPI firmed to 0.4 percent month over month and 2.9 percent year over year, a touch hot, but the market still leans toward an initial cut with debate centering on the pace thereafter. Political crosscurrents around the Fed’s membership add uncertainty at the margins, which gold tends to price as a risk premium.
Central bank net buying remains a supportive undercurrent even as the monthly pace slowed mid-summer. The World Gold Council reported continued positive ETF flows in August, a contrast to 2024’s intermittent outflows. Jewelry demand has softened at high prices, particularly in China and India, which trims some physical elasticity, yet investment demand has more than offset that drag during this macro phase.
Looking Forward
Base case for this week is a choppy but constructive range with a bullish bias. If the Fed cuts 25 bp and the dot plot hints at additional easing into year-end, a topside break above 3,675 could gather momentum toward 3,730 and 3,780. A more cautious message from Powell that stresses data dependence and resists telegraphing follow-on cuts would likely keep gold contained in a 3,600 to 3,675 band, with dips probing the 3,608 to 3,566 Fibonacci pocket before buyers re-engage.
Watch the dollar path into and out of Wednesday. A softening DXY back below last week’s lows would be the easiest catalyst for a gold extension. Conversely, if the dollar firms alongside a pop in the 10-year back above the recent 4.1 percent area, expect gold to oscillate and respect supports instead of trending immediately. Flows and positioning suggest pullbacks should be shallow while ETF demand and elevated spec longs argue for two-way volatility around the event.
