Gold Forecast: XAU/USD Consolidates Above $4,200 After Record Rally
Gold’s historic surge took a breather late last week as the yellow metal briefly corrected from new all-time highs near $4,380, dropping almost $200 before finding firm support around $4,200. The pullback was sharp but orderly, suggesting a healthy consolidation rather than a full-blown reversal.
After weeks of relentless gains and record closes, a period of profit-taking was inevitable. Despite Friday’s heavy candle hinting at a potential short-term top, the broader bullish structure remains intact. Gold’s uptrend continues to be underpinned by strong fundamentals, leaving little reason to assume the rally has run its course.
Upcoming Events in Focus
This week’s calendar carries several potential catalysts for renewed volatility. The delayed U.S. CPI report, now expected on Friday (October 24), will be closely watched. Markets anticipate headline inflation to rise 0.4% and core CPI by 0.3%.
A softer print could fuel bets on further Federal Reserve rate cuts, likely supporting gold prices, while a stronger figure may revive the U.S. dollar and cap short-term upside. The ongoing U.S. government shutdown continues to stall other key data releases, keeping the spotlight on inflation and central bank policy expectations.
Elsewhere, U.K. CPI data on Wednesday and global PMI releases on Friday could influence sentiment across major currency pairs and commodities.
Why Gold Still Has Momentum
Gold’s impressive rally has been powered by several aligned forces:
- Persistent central bank purchases, particularly from emerging markets.
- Lower U.S. yields and a softer dollar amid expectations of two more Fed cuts this year.
- Geopolitical tension between the U.S. and China, keeping safe-haven demand alive.
These underlying supports show no sign of fading, suggesting that recent weakness is a temporary pause in a broader bullish trend.
Eyeing $5,000: Still a Possibility?
While the $5,000 mark may sound ambitious, it’s no longer unrealistic given the scale of the ongoing move. Every dip this year has been met with aggressive buying, indicating sustained confidence among long-term investors.
A deeper correction toward $4,000 would not undermine the uptrend—it would likely attract renewed buying interest. For now, there’s little evidence of panic or long-term profit-taking, and momentum remains on the bulls’ side.
Traders should remain cautious about shorting against this strength. Gold has repeatedly punished bearish bets, and unless clear downside follow-through emerges, the dominant bias remains upward.
Technical Picture
On the charts, XAU/USD maintains a strong bullish structure, defined by higher highs and higher lows. All key moving averages continue to point upward, confirming a well-established trend. However, overbought momentum readings hint that a short-term cooling phase or sideways action could develop before the next breakout.
Immediate support levels: $4,200, $4,180, $4,059, $4,023, and $4,000
Resistance zones: $4,380, $4,400, and $4,500
As long as gold stays above $4,000 and maintains its higher-low structure, the path of least resistance remains to the upside, keeping the bullish gold outlook intact.