Gold (XAU) Price Forecast: Bullish Momentum Holds Above $2800 as PCE Data, Tariffs Loom

Gold Hits Record High as Tariff Uncertainty Fuels Safe-Haven Demand

Gold prices surged to a record high on Friday, briefly touching $2,800 per ounce, as renewed tariff threats from the U.S. drove investors toward safe-haven assets. President Donald Trump reaffirmed plans to impose 25% tariffs on imports from Mexico and Canada while considering additional levies on Chinese goods.

Spot gold later steadied after hitting $2,805.92 earlier in the session. The metal gained over 6% for the month and ended the week up 1%. “The rally could hold for as long as there is uncertainty in the market. A lot of today’s uncertainty stems from not knowing whether and how tariffs will be applied,” said Nitesh Shah, commodities strategist at WisdomTree.

At 12:30 GMT, XAU/USD is trading $2804.96, up $10.80 or +0.39%.

Central Bank Buying and Inflation Risks Keep Gold Supported

Beyond trade tensions, steady central bank demand remains a key pillar of support for gold. “We see central bank buying as the strongest structural force in the gold market,” said Carsten Menke, an analyst at Julius Baer.

Traders are now shifting focus to the upcoming U.S. personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure. The report could offer fresh clues on the Fed’s next policy move. Earlier this week, Fed Chair Jerome Powell reiterated that interest rate decisions would depend on inflation and labor market conditions.

Meanwhile, U.S. GDP data released on Thursday showed the economy grew at a weaker-than-expected 2.3% annualized rate in the fourth quarter. However, consumer spending rose at its fastest pace in nearly two years, suggesting inflationary pressures could persist.

Treasury Yields Edge Higher as Traders Brace for Inflation Data

U.S. Treasury yields inched higher on Friday as investors positioned ahead of key economic releases, including the PCE inflation report, personal spending, and employment cost data.

The Fed held rates steady at 4.25%-4.50% at its first meeting of the year, citing inflation risks despite political pressure for cuts. Powell stated the central bank needs to see “real progress on inflation or some weakness in the labor market” before considering adjustments. With policy uncertainty lingering, gold remains a strong hedge.

Gold Prices Forecast: Bullish Momentum Targets $3,000

With trade tensions, central bank buying, and inflation concerns supporting gold, analysts see further upside potential. “If the combination of high inflation and sluggish growth unfolds, then the $3,000 level will appear increasingly plausible,” said Ricardo Evangelista, senior analyst at ActivTrades.

However, high prices have dampened physical demand, particularly in India, where buyers are waiting for the February 1 federal budget. While this could create short-term resistance, overall sentiment remains bullish.

Traders now await the PCE report. A stronger-than-expected inflation print could push gold prices even higher.

More Information in our Economic Calendar.