Gold Returns to Its Golden Age. Forecast as of 15.08.2025 | LiteFinance
In the previous Fed rate-cutting cycle amid rising inflation in 2007–2008, gold surged 47%. History is repeating itself, and the outlook for the precious metal remains optimistic. Let’s discuss it and make a trading plan for XAUUSD.
The article covers the following subjects:
Major Takeaways
- Tariffs sent gold on a roller coaster.
- The metal is now in a favorable environment.
- XAUUSD will rise as the Fed cuts rates.
- A breakout above $3,350 and $3,375 is a signal to buy gold.
Weekly Fundamental Forecast for Gold
Gold has rattled investors’ nerves, riding a roller coaster twice — first because of tariffs, then on US inflation data. What doesn’t kill us makes us stronger. If the metal can recover after such shocks, its outlook is optimistic.
When New York gold prices rise, large bars are normally melted down in Switzerland into 1-kilogram units and shipped to North America. Over the past three years, XAUUSD prices have more than doubled, and since early 2025, they have risen by a quarter. That’s why the flow of gold from the Old World to the New World has been running at full speed. The process accelerated after US Customs and Border Protection announced that Switzerland would face a 39% tariff on gold exports to the US.
Major Gold Importers
Source: Bloomberg.
Such a duty implies New York gold prices should be around $4,700 per ounce. Unsurprisingly, futures jumped to a record high above $3,500, while the spread against London widened to more than $100. The White House was then forced to call the announcement misinformation — another example of TACO, or “Trump Always Caves Over.” Gold failed to hold above the upper boundary of its medium-term consolidation range at $3,250–3,400 per ounce and collapsed sharply. However, the thriller didn’t end there.
The lack of acceleration in US consumer prices convinced the futures market that the Fed will cut the federal funds rate in September. Treasury Secretary Scott Bessent added fuel to the fire by saying forecast models show borrowing costs should be lowered by 150–175 bps. If that happens, Treasury yields and the US dollar will fall in tandem. That creates the perfect environment for the precious metal.
Fed Rate and Treasury Yields Dynamics
Source: Bloomberg.
US economic history includes a case when the Fed cut rates despite rising inflation. In late 2007 to early 2008, the greenback dropped 11% to a local bottom, while gold surged 47%.
In mid-August, the Producer Price Index weighed on gold’s sentiment. Its fastest increase in three years points to stagflation and makes Fed officials question the need for monetary easing in September. I doubt one report will change their plans, though. The futures market is pricing in a 93% probability of a rate cut at the next FOMC meeting.
Weekly Trading Plan for XAUUSD
Under these conditions, gold should quickly recover from its recent shocks. Moreover, White House pressure on the Fed boosts demand for the precious metal as a safe-haven asset. Traders should consider buying XAUUSD on breakouts above $3,350 and $,3375.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAUUSD in real time mode
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