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Gold (XAUUSD) continues to climb as markets raise expectations for a Fed rate cut in September. The move reflects soft U.S. job data and sustained Dollar pressure. The recent labor data has fueled expectations of policy easing, which supports stronger demand for gold. Meanwhile, ongoing political tension in Japan and Europe, along with U.S. trade uncertainty, continues to lift demand for safe-haven assets. As the Dollar weakens and Treasury yields decline, gold continues to gain support from multiple factors.

Gold Rally Strengthens On Weak Jobs Report, Rate-Cut Bets, and Political Risks

Gold continues to climb as markets anticipate a Federal Reserve rate cut in September. Last week’s Nonfarm Payrolls (NFP) report showed just 22,000 jobs added, well below forecasts, while the unemployment rate rose to 4.3%. Soft labor data has reinforced expectations of a 25-basis-point rate cut, while some now see a chance of a 50-bps move. Consequently, lower rates make gold more appealing, particularly during periods of economic stress.

The U.S. Dollar has come under renewed pressure, further supporting gold’s rise. In particular, the Dollar Index (DXY) is now trading near the bottom of its recent range, reflecting reduced demand. At the same time, U.S. Treasury yields have declined sharply, with the 10-year near 4.05% and the 2-year around 3.48%. Lower yields reduce the opportunity cost of holding gold and boost demand for safe-haven assets.

Moreover, rising political instability in global markets is boosting demand for gold. Prime Minister Ishiba’s resignation has created uncertainty in Japan. Meanwhile, France is under pressure ahead of a confidence vote on its fiscal plan. Trade risks persist in the U.S. as Secretary Bessent cautioned that reversing tariffs may require refunding up to $1 trillion. These global concerns, paired with upcoming inflation data, could further shape the Fed’s decision and drive gold’s next move.

Gold Breaks Out Of Consolidation within Ascending Channel, Targets $4,000–$4,100

The gold chart below shows a well-defined ascending channel, with price steadily moving higher inside the channel. Price had been consolidating below the $3,440 level, which acted as strong horizontal resistance. This barrier was finally breached at the start of September, triggering a sharp vertical rally that confirmed the strength of the bullish trend.

(Click on image to enlarge)

Interestingly, the breakout occurred near the upper boundary of a narrowing range that had developed inside the channel. This technical alignment reinforced the move and helped renew bullish momentum. Since then, gold has surged by more than $200, now approaching the upper edge of the broader channel. Looking ahead, the next major target lies between $4,000 and $4,100. This area aligns with the upper boundary of the channel and a key long-term projection shown by the red dashed trendline.

Moreover, technical indicators continue to support the upside. Volume patterns remain strong, and the candle structure shows no signs of exhaustion. Recent price action points to continued strength, while any pullbacks may find support near the former breakout zone around $3,400–$3,440. Overall, the setup indicates that gold could be shifting from a steady climb into the early stage of a sharp upward acceleration.

Gold Outlook: Fed Policy, Inflation Data, and Technical Strength to Guide Next Move

Gold remains well-supported by a combination of weak U.S. labor data, falling yields, and growing expectations of Fed policy easing. At the same time, global political instability and trade uncertainty continue to drive demand for safe-haven assets. On the technical front, gold trades firmly within an ascending channel and shows no signs of losing strength. Gold is approaching the $4,000–$4,100 target zone and remains poised for further gains. However, attention now turns to upcoming inflation data and the Fed’s policy response. 

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