XAU/USD Surges Beyond $4,350 Amid Geopolitical Shifts and Rate Cut Expectations

Gold price forecast shows bullish momentum as XAU/USD approaches $4,370 level

During Monday’s early Asian trading session, gold price reached approximately $4,370, extending its recent gains as investors seek shelter in safe-haven assets. The precious metal’s strength reflects a confluence of factors reshaping market sentiment around traditional wealth preservation instruments.

Multiple drivers supporting gold price gains

The recent escalation involving US-Venezuela tensions has reignited geopolitical risk premiums in financial markets. Over the weekend, reports confirmed significant diplomatic developments in the region, with implications extending to global energy markets and currency stability. Such uncertainties typically redirect capital toward assets viewed as risk buffers, benefiting non-correlated investments like gold.

Simultaneously, the Federal Reserve’s latest policy signals are creating tailwinds for gold price appreciation. Recent FOMC minutes revealed that a majority of Fed officials consider future interest-rate cuts justifiable as long as inflation trajectories remain favorable. This dovish lean matters significantly for gold because lower rates diminish the yield advantage of holding cash or bonds, making the non-yielding precious metal comparatively more attractive to portfolio managers.

Upcoming data could test gold’s momentum

The week ahead presents critical junctures for XAU/USD’s directional bias. The US ISM Manufacturing Purchasing Managers’ Index reading scheduled for Monday will offer fresh insights into manufacturing sector health. More substantially, the Nonfarm Payrolls (NFP) report due later in the week carries outsized market impact. Current expectations point to job growth of 57,000 positions, though stronger-than-expected employment figures could trigger USD strength and potentially pressure gold price from current levels.

This dynamic creates a two-way scenario: geopolitical risk and fed rate-cut bets currently support the gold price forecast, while robust economic data could challenge these gains by elevating the US Dollar’s appeal relative to XAU/USD.