Gold (XAU) Price Forecast: Bullish Outlook Intact Despite Short-Term Correction Risk

Gold Prices Forecast: Record High Reversal Raises Short-Term Correction Risk

Gold prices are pulling back Monday after briefly setting a fresh all-time high at $3,245.85, surpassing Friday’s record by just 36 cents. However, the rally quickly lost steam, prompting profit-taking and setting the market up for a potential short-term top. Despite the retreat, bullion remains above the key $3,200 level, supported by persistent macro uncertainty and a weaker U.S. dollar.

At 11:07 GMT, XAU/USD is trading $3217.79, down $20.13 or -0.62%.

Chart Pattern Signals Possible Near-Term Correction

Monday’s price action raises the risk of a closing price reversal top. If confirmed, this technical setup could trigger a 2–3 day pullback. The initial downside target sits at the pivot near $3,101.20, while major support lies at the 50-day moving average, currently at $2,978.32. A breakout above $3,245.85 would invalidate the reversal pattern and confirm a continuation of the uptrend.

Tariff Policy and Safe-Haven Demand Keep Floor Under Gold

U.S. President Donald Trump’s decision to exempt smartphones, computers, and semiconductors from new reciprocal tariffs sparked improved market sentiment and pressured gold slightly. However, lingering uncertainty about future tariff rates and the durability of the exemptions is keeping safe-haven flows alive. According to OANDA’s Zain Vawda, “A US-China deal seems unlikely anytime soon,” which should continue to support demand for gold.

Goldman Sachs Raises Bullish Outlook on Central Bank Buying and ETF Inflows

Goldman Sachs remains the most bullish among major banks, lifting its gold price forecast to $3,700, citing robust central bank buying and growing concerns over recession risks. In extreme scenarios tied to potential Federal Reserve policy subordination or changes in U.S. reserve strategy, Goldman sees a possible spike to $4,500.

Weaker U.S. Dollar and Bond Market Volatility Add Support

The U.S. dollar index has touched a three-year low, further enhancing gold’s appeal to international buyers. Meanwhile, extreme bond market volatility, including a 50 basis-point surge in the 10-year yield last week, has rattled investor confidence in U.S. Treasurys. Although there’s no confirmed selling from foreign holders, fear of such moves alone is fueling demand for non-yielding safe-haven assets like gold.

Market Forecast: Bullish With Near-Term Correction Risk

Gold’s longer-term outlook remains bullish, underpinned by geopolitical uncertainty, strong institutional demand, and a weakening dollar. However, Monday’s failed breakout attempt and potential reversal pattern point to a possible short-term pullback toward $3,100 or lower before bulls retake control. Traders should watch for a decisive move above $3,245.85 to confirm trend continuation.

More Information in our Economic Calendar.