XAU/USD outlook: Gold advances further on growing expectations of Fed rate cut

Gold price rose further on Friday and hit the highest since mid-June, after relatively benign US inflation data (PCE) added to expectations for Fed rate cut in September and opened prospects for probably one more cut by the end of the year.

Fresh political turbulence over President Trump’s attempts to fire Fed Governor Cook also contributed to increased safe-haven demand.

The yellow metal is on track for the second consecutive weekly gain and for the biggest monthly advance since April, which also generates an initial bullish continuation signal after the price action in past three months was in extended consolidation under new record high, shaped in a triple long-legged monthly Doji candles.

Fresh rally cracked target at $3438 (July 23 high), bringing in focus $3452 (June 16 peak) the last obstacle en route to $3500 (record high, posted on April 22).

Firmly bullish technical picture on daily chart (north-heading daily Tenkan/Kijun-sen diverging after formation of bull-cross / strong positive momentum) could be obstructed by strongly overbought stochastic.

Potential dips are likely to be limited in current improved environment and to provide better levels to re-enter broader bullish market.

Hourly top ($3423) should offer solid support and ideally contain dips, with stronger pullback expected to find firm ground above $3400 zone (former top of Aug 8 / psychological), now reverted to supports, to keep larger bulls in play.

Res: 3400; 3408; 3438; 3445

Sup: 3423; 3408; 3400; 3390