Gold (XAU) Price Forecast: Bulls Target Fresh Records Despite Rising Treasury Yields

Record Gold Prices Hold – But Can Bulls Maintain Control?

Gold maintained its upward momentum on Friday, closing at $2,747.22, marking its third consecutive weekly gain despite concurrent strength in both Treasury yields and the U.S. dollar. The precious metal shows remarkable strength after reaching a record high of $2,758.53 earlier this week, breaking typical market correlation patterns with yields and the dollar. Traders should watch weekend geopolitical developments for Monday’s opening direction.

Treasury Yields Signal Market Turn – Where’s The Ceiling?

Treasury yields advanced with the benchmark 10-year reaching 4.24%, extending from Wednesday’s three-month peak. While this movement typically pressures gold prices, Middle East tensions and U.S. election uncertainty have reinforced gold’s safe-haven appeal, driving its 32% gain year-to-date. Key resistance sits at 4.30% – a break above could trigger fresh market volatility.

Dollar Strength Returns – Will Global Currencies Cave?

The dollar index strengthened to 104.24, locking in its fourth consecutive week of gains. Strong economic indicators, including better-than-expected business spending data and improved consumer sentiment readings, have reduced expectations for aggressive Federal Reserve rate cuts. Watch for early Asian trading patterns Sunday night as Japanese election results emerge.

Rate Cut Expectations Cool – What’s The Fed’s Next Move?

Market positioning now shows a 95.6% probability of a 25-basis-point rate cut at the Federal Reserve’s November meeting, markedly down from previous expectations of larger cuts. Fed officials maintain a cautious stance, with Cleveland Fed’s Hammack stating clearly that the inflation battle remains ongoing. Next week’s payroll numbers could reshape these expectations entirely.

Short-Term Forecast: Safe-Haven Demand Tests Technical Limits

The short-term outlook for gold remains bullish despite opposing market forces. The rare combination of rising yields, dollar strength, and climbing gold prices indicates that safe-haven buying overshadows traditional market relationships. Support holds at $2,708.76, with resistance at $2,758.53 becoming the next key target. Critical factors to monitor include:

• Weekend developments in Middle East tensions
• Early Asian market reaction to Japanese election results
• Technical resistance levels at $2,758.53
• Next week’s U.S. payroll data, accounting for Boeing strike effects