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Gold is on track for its third consecutive weekly gain, with XAU/USD holding above the psychologically important US$4,500 per ounce level.

On Friday, August 21, spot gold traded around US$4,550, after reaching its highest levels since early June. The metal has gained approximately 4.35 % this week, extending a rally that has been supported by a weaker US dollar, shifting expectations for Federal Reserve policy and renewed concerns about the US bond market.

The latest move is significant.

Just a few weeks ago, gold was still trading below US$4200. It has since broken through US$ 4,300, US$4,400 and now US$4,500.

For Australian traders, the key question is no longer whether gold can break US$4,500.

It is:

Can XAU/USD hold above US$4500 and extend the rally towards US$4,600 — or will rising inflation and a potentially hawkish Federal Reserve trigger another correction?

Gold Price Today

SELL BUY

Gold's latest rally accelerated after the US Treasury announced an expansion of buyback operations for longer-dated government bonds.

The move helped push Treasury yields and the US dollar lower, creating a favourable environment for gold.

Reuters reported that spot gold rose to approximately US$4,550 per ounce on August 21, putting the metal on track for a third consecutive weekly gain. The weaker US dollar has also made dollar-denominated gold more attractive to overseas buyers.

The broader rally has been impressive.

Gold has moved from a period of consolidation earlier in the summer into a strong breakout, with buyers successfully pushing through several major psychological levels.

However, the pace of the advance also increases the risk of volatility.

After breaking above US$4,500, traders are now watching whether the level can become a reliable support zone.

The weakening US dollar has also received additional support from a shift in Wall Street expectations.

Citigroup's currency strategists have turned more bearish on the dollar in the short term, cutting their three-month forecast for the US Dollar Index from 102.12 to 98.34.

The shift reflects concerns surrounding Treasury buybacks, expectations for a less aggressive Fed and rising political uncertainty ahead of the US midterm elections.

A weaker dollar would generally provide a supportive environment for gold.

However, traders should not treat any bank forecast as a certainty.

The dollar could still rebound sharply if:

• US inflation surprises to the upside

• The Fed becomes more hawkish

• Treasury yields rise significantly

• Global risk sentiment deteriorates in favour of the US dollar

Nevertheless, Citi's revised outlook highlights an important change in market positioning.

For now, dollar weakness remains one of the strongest fundamental supports for XAU/USD.

The next major policy event for gold traders is likely to be the Jackson Hole Economic Symposium.

Markets will closely watch Federal Reserve Chair Kevin Warsh for clues about how policymakers are interpreting the recent slowdown in employment, changes in inflation and the rise in Treasury-market volatility.

The Fed has provided relatively limited forward guidance, making major speeches increasingly important for market expectations.

Three broad scenarios could influence gold.

Dovish Scenario

If the Fed signals that slowing growth and moderating inflation reduce the need for further tightening, Treasury yields and the US dollar could decline further.

That would be potentially bullish for gold.

Hawkish Scenario

If policymakers focus heavily on persistent inflation and signal that higher interest rates may still be required, yields could rebound.

This would create a significant risk of profit-taking in XAU/USD.

Neutral Scenario

If Warsh provides limited guidance and remains strongly data-dependent, gold could continue consolidating above US$4,500 while traders wait for the next major inflation and employment data.

Source: Tradingview

From a technical perspective, US$4,500 is now the most important level on the chart.

The metal has broken above the level and continues to trade around it, suggesting that the market is attempting to transform a major resistance zone into support.

The technical structure can now be viewed as follows:

The current technical setup remains constructive while XAU/USD holds above approximately US4,460–US4,500.

A sustained move above the recent highs could bring US$4,600 into focus.

Beyond that, US$4,700 and US$4,800 would become more relevant medium-term levels.

However, a decisive break below US$4,460 could signal that momentum is weakening.

A move below US$4,400 would represent a more significant deterioration in the bullish structure.

Australian investors can gain exposure to gold in several ways, including:

• Physical gold

• Gold ETFs

• Gold mining shares

• Futures

• Gold CFDs

Each option has different risks, costs and trading characteristics.

Trading Gold CFDs

Gold CFDs allow traders to speculate on movements in XAU/USD without owning physical bullion.

This means traders can potentially:

Go long if they expect gold prices to rise.

Or:

Go short if they expect gold prices to fall.

This flexibility can be useful during periods of heightened volatility around events such as Federal Reserve meetings, US inflation data and major Treasury-market developments.

However, CFDs are leveraged products, meaning both potential gains and losses can be magnified.

Trade Gold CFDs with Mitrade

For Australian traders watching whether XAU/USD can hold above US$4,500 and move towards US$4,600, Mitrade provides access to gold CFDs through its online trading platform.

Traders can monitor live gold prices, analyse market developments and take positions based on whether they expect XAU/USD to rise or fall.

Trade XAU/USD with Tight Spreads

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CFDs are complex instruments and come with a high risk of losing money. 

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