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Gold (XAUUSD) continues to climb as the Federal Reserve shifts toward a more dovish stance. Last week’s 25 basis point rate cut marked the third and final cut for 2025. Powell signaled a pause in further tightening, boosting expectations for prolonged low rates into 2026. This shift has lowered real yields and increased demand for non-yielding assets like gold. At the same time, rising geopolitical risks have strengthened demand for safe-haven assets. These combined factors continue to create a supportive backdrop for gold.

Gold Supported by Fed Rate Cut and Long-Term Dovish Outlook
 

Gold continues to climb as shifting Fed policy and falling yields boost demand for safe-haven assets. The Federal Reserve’s decision to cut interest rates by 25 basis points last week marked its third and final cut for 2025. Fed Chair Jerome Powell noted that the central bank is now in a “comfortable position” and will likely hold rates steady in the coming months. This shift has lifted expectations for a sustained low-rate regime into early 2026. This has created conditions that support gold, especially as lower yields reduce the cost of holding the metal.

Market attention has shifted to key economic indicators, with employment data likely to influence the Fed’s next move. Tuesday’s reports, including Nonfarm Payrolls and wage growth figures, will be closely watched for signals on labor market strength. Signs of softness would likely support the case for further easing. On the other hand, stronger job data may lead to a temporary pullback in gold. These developments will play a critical role in shaping the outlook for monetary policy going into 2026.

Rising geopolitical tensions have further strengthened gold’s appeal as a safe-haven asset. Over the weekend, a tragic mass shooting at Bondi Beach in Sydney left 16 people dead and many others injured. Authorities described the incident as a targeted terrorist attack, raising fresh concerns about global security. In this climate of heightened uncertainty, demand for defensive assets like gold has increased. These factors, along with a more dovish policy stance, create a favorable environment for gold.

Gold Forms Bullish Cup Patterns Within Ascending Channel Structure
 

The gold chart below shows a well-defined ascending channel that has contained price action over the past several months. This structure has guided the broader uptrend, with price consistently respecting both upper and lower boundaries. Price continues to hold within the channel, with recent movement supported by the lower trendline and trending upward.
 

Within this rising channel, three distinct cup formations have emerged in sequence. Each structure reflects a phase of rounded consolidation, followed by a strong upward continuation. These repeated patterns signal sustained accumulation and highlight the strength of the broader bullish trend. The most recent cup appears to be nearing completion, with price now testing the neckline. A confirmed breakout from this level could trigger a sharp move higher toward the upper boundary of the channel.

Gold continues to respect key technical levels, trading within the lower portion of the ascending channel. While price remains below horizontal resistance, the overall structure still favors the bulls. The series of higher lows and tight consolidation near the neckline suggest building pressure. With no clear signs of exhaustion, gold appears technically well-positioned for continued upward movement within the rising channel.

Gold Outlook: Dovish Fed, Safe-Haven Demand, and Technical Strength Support Gains
 

Gold remains well-positioned for further gains. The Fed’s dovish shift, falling yields, and rising geopolitical risks continue to support safe-haven demand. Technically, price action holds within a bullish ascending channel, with multiple cup formations supporting the trend. As long as gold respects key support levels and macro conditions remain favorable, the path of least resistance points higher. 

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