Gold prices remain firmly supported near record highs as lingering US-China trade tensions, expectations of aggressive Federal Reserve rate cuts in 2025, and a persistently weak US Dollar continue to drive safe-haven demand. Although temporary tariff exceptions declared by President Trump have provided some relief in global risk appetite, persistent doubt regarding future trade policy and fears of recession continue to incline investors towards the non-yielding yellow metal. Market focus is now on upcoming US economic indicators and Fed Chairman Jerome Powell’s speech, which are likely to provide new cues on the Fed’s policy trajectory and may impact the next direction for gold.

KEY LOOKOUTS

•  Continuous tariff threats and retaliations are further propelling market uncertainty, sustaining gold prices at higher levels as investors take refuge in bullion.

•  Increasing bets on several Federal Reserve rate cuts in 2025, fuelled by recession concerns and tariff-related economic stress, are expected to be a drag on the US Dollar and buoy gold.

•  Gold continues to be firmly bullish above the $3,200 level, with resistance targeted near record high of $3,245-$3,246. A breakout below $3,167 may initiate a further correction.

•  Investors look for hints from Fed Chair Jerome Powell’s imminent speech on directions for future monetary policy that may have a large bearing on the near-term path of gold.

Gold prices remain near all-time highs as investors balance ongoing US-China trade tensions, a soft US Dollar, and increasing expectations of Federal Reserve rate cuts in 2025. Although short-term tariff reprieves announced by President Trump have modestly improved global risk sentiment, the overall uncertainty regarding future trade policy and its economic consequences maintains demand for safe-haven assets such as gold firm. The metal’s bullish momentum is still in place above the crucial $3,200 support level, although technical indicators point to a possibility of short-term consolidation. In the near term, all eyes are still on Fed Chair Jerome Powell’s speech later this week, which is likely to provide more hints on the central bank’s policy direction and could dictate the tone for gold’s next major move.

Gold prices remain close to record levels as trade tensions and expectations of a Fed rate cut fuel safe-haven demand. The US Dollar weakness continues to underpin the metal, with markets waiting for Fed Chair Powell’s speech for new policy signals.

•  Gold (XAU/USD) remains firm around $3,230, just below its record high, due to ongoing safe-haven demand.

• Persistent US-China tariff tensions and economic danger concerns keep driving investors to gold as a haven asset.

• Markets are already pricing in several Federal Reserve interest rate cuts during 2025, which puts downward pressure on the USD and makes gold more attractive.

• A bearish outlook for the US Dollar as a result of recession concerns and trade-related uncertainty continues to buoy higher gold prices.

• Optimism about Trump’s temporary tariff reprieves on electronics and possible auto exemptions has put a cap on new upside for gold, even with the overall bullish trend.

• Support is close to $3,200, while a breakout above $3,245 would confirm more gains; a breakdown below $3,167 could usher in an even larger correction.

• Market players wait for Fed Chair Jerome Powell’s coming address, which should provide important guidance on the rate cut trajectory and possible drivers of gold’s next significant movement.

Gold prices are still underpinned as international markets struggle with increasing uncertainty driven by persistent US-China trade tensions and escalating anxiety about an economic downturn. The latest increase in tariff threats, coupled with China’s retaliatory actions, has forced investors to turn to safe-haven assets such as gold. Contributing to the positive sentiment, speculation remains increasing that the Federal Reserve will act against these trade-induced risks by making aggressive interest rate reductions in 2025, further devaluing the US Dollar and increasing the attractiveness of gold as a store of wealth.

XAU/USD DAILY PRICE CHART

CHART SOURCE: TradingView

Although short-term relief was given by the White House’s announcement to exclude some products from tariffs, investors are still guarded because President Trump’s trade policy implies further policy turns may be on the horizon. Markets are also watching for coming economic indicators and comments from Federal Reserve officials, particularly Fed Chairman Jerome Powell, for hints on future monetary policy. With the international risk environment remaining strained and inflation worries still present, gold remains in focus as a trusted hedge during uncertain times.

TECHNICAL ANALYSIS

Gold prices remain in firm bullish momentum, comfortably above crucial support levels. The recent price action indicates that the buyers are still in command, particularly after fending off the $3,200 zone and moving higher towards all-time highs. But the Relative Strength Index (RSI) shows the metal is heading into the overbought zone, and that may trigger a short-term consolidation prior to any additional rally. So long as gold remains above its near-term support floor, the general uptrend continues intact, and any firm break above recent levels would leave the way open for new all-time highs in the days ahead.

FORECAST

Gold prices are likely to extend their bullish momentum if trade tensions persist and global economic uncertainty deepens. Continued weakness in the US Dollar, combined with expectations of multiple Federal Reserve rate cuts in 2025, could further fuel demand for the safe-haven metal. If investor sentiment remains risk-averse amid ongoing tariff threats and recession concerns, gold could attempt to break above its recent record high, potentially setting new all-time peaks in the coming weeks.

Conversely, however, any meaningful shift in global risk appetite — for example, news of US-China trade talks breakthrough or additional tariff relief — would cut into the popularity of safe-haven assets such as gold. Moreover, if future US economic releases demonstrate unforeseen strength or if Federal Reserve policymakers hint at a reduced rate-cutting tempo, the US Dollar could bounce back, putting downward pressure on gold prices. In such a situation, the market would in all likelihood attempt to correct and fall back toward the lower supports levels before relocating.