Focus on the Medium-to-Long-Term Outlook for Gold Prices

Summary:

Gold prices hovered below US$3,780 on Wednesday, nearing the record high set the previous day. The market continued to digest comments from Federal Reserve officials, including Chairman Powell.

BUY XAUUSD

Close Time

CLOSED

3764.85

Entry Price

3850.00

3729.00

4142.27 -18.39 -0.44%

358.5

Pips

Loss

3729.00

3728.91

Exit Price

3764.85

Entry Price

3850.00

Fundamentals

Powell acknowledged the challenges facing the Federal Reserve, noting that both supply and demand in the U.S. labor market have shown a "marked slowdown", describing this as an unusual and challenging development. He pointed out that while other indicators such as job openings and initial jobless claims have remained largely stable, current employment growth appears to be below the break-even level needed to keep unemployment stable.

Regarding inflation, Powell emphasized that recent price pressures stem primarily from tariffs rather than evidence of broad-based economic overheating. Inflation in services, including housing, continues to decline, and most long-term inflation expectations remain stable near the Fed's 2% target. While inflation expectations have risen slightly recently due to tariff news, Powell believes these effects are likely temporary.

He described the tariff shock as "a one-time change in the price level," with the impact "spreading out over several quarters" as supply chains absorb the higher costs.

Powell reiterated that the Fed's policy is not on a predetermined path. Decisions will continue to depend on incoming data and the balance of risks, with the Federal Open Market Committee seeking to manage both slowing job growth and temporary tariff-related inflation without overreacting.

Following cautious remarks from Federal Reserve Chair Powell regarding potential rate cuts, the dollar found some positive support after two consecutive days of decline. Nevertheless, gold prices also gained support amid robust buying activity.

This week, the precious metals market maintained its strong upward momentum, with gold hitting a record high and silver reaching its highest level since 2011. Despite a rebound in the dollar, both gold and silver continued to rise, highlighting the resilience of safe-haven demand and strategic asset allocation. Gold is now targeting the US$3,800 threshold, while silver advances toward the US$50 threshold—both levels carrying significant psychological and technical weight.

Focus on the Medium-to-Long-Term Outlook for Gold Prices_1

Technical Analysis

From a technical perspective, the price action since the last all-time high of US$3,500 offers multiple interpretations. However, in most scenarios, the current bullish trend should have initiated from US$3,267. The short-term outlook remains bullish as long as the US$3,627 support level holds. The next targets are US$3,833 and the psychological level of US$3,850, representing a 61.8% retracement from US$3,267 to US$3,499.

On a broader scale, the long-term outlook for gold is more appealing. The uptrend from US$1,046 (2015 low) is still in an acceleration phase. The current rally from US$1,614 is viewed as the fifth wave of the advance, with a target of US$4,009, which is the 261.8% projection of the US$1,160 to US$2,074 range.

Trading Recommendations

Trading Direction: Buy

Entry Price: 3760

Target Price: 3850

Stop Loss: 3729

Valid Until: October 9, 2025 23:55:00

Support: 3770, 3761, 3759, 3748

Resistance: 3790, 3800, 3816, 3833

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