Gold (XAU) Price Forecast: Bulls Target Record High as Safe-Haven Demand Surges

Gold Surges Toward Record High as Safe-Haven Demand Intensifies

Gold prices are pushing sharply higher on Thursday, coming within reach of the all-time high at $2,790.17. A breakout above this level could open the door for further upside momentum. Support sits at $2,730.56, and a break below this level would shift sentiment bearish, potentially triggering a decline toward the 50-day moving average at $2,669.51. Traders are closely monitoring these key technical levels as the market reacts to political and economic developments.

At 12:49 GMT, XAU/USD is trading $2780.80, up $20.40 or +0.735.

Trump’s Tariff Threats Drive Safe-Haven Demand

Investor anxiety over potential U.S. tariffs under President Donald Trump has bolstered gold’s safe-haven appeal. While gold itself is unlikely to face direct tariffs, risk managers are moving physical metal into the U.S. as a precaution. This has caused a spike in exchange-for-physical (EFP) transactions, reinforcing support in the spot market.

London bullion market participants are scrambling to borrow gold from central banks to meet increased demand following a surge in deliveries to New York. Although Trump has yet to mention gold in any tariff discussions, market participants are hedging against uncertainty. Traders are also eyeing the White House’s move to impose steep tariffs on Mexico and Canada, with potential implications for global trade and risk sentiment.

Fed Holds Rates Steady, Traders Await Inflation Data

The Federal Reserve opted to keep interest rates unchanged on Wednesday, as widely expected. Fed Chair Jerome Powell signaled no urgency to cut rates further, emphasizing the need for “real progress on inflation” or labor market weakness before any adjustments. The central bank remains in a wait-and-see mode, with traders now focusing on Friday’s release of the U.S. Personal Consumption Expenditures (PCE) price index—a key inflation gauge that could influence gold’s next move.

Treasury yields dipped following the Fed’s decision, with the 10-year yield slipping 6 basis points to 4.492% and the 2-year yield falling nearly 3 basis points to 4.201%. A prolonged period of high interest rates could weigh on gold in the longer term, but for now, uncertainty surrounding inflation and Trump’s policies is keeping demand strong.

U.S. Dollar Strengthens, But Gold Remains Resilient

The U.S. dollar firmed against major currencies after the Fed’s policy decision, but gold remained well-supported. Fed officials gave little indication of future rate cuts, adding to dollar strength. However, traders remain cautious about the potential economic impact of Trump’s trade policies, which could fuel further gold buying.

Karl Schamotta, chief market strategist at Corpay, noted that the Fed’s stance appears slightly hawkish but that uncertainty over fiscal and trade policies remains high. With markets awaiting clearer signals on inflation and employment, gold continues to act as a preferred hedge against uncertainty.

Gold Prices Forecast: Bulls Eye Breakout Above Record High

Gold’s technical and fundamental setup remains bullish as long as prices hold above key support at $2,730.56. A move above $2,790.17 would likely trigger fresh buying, potentially pushing prices to new highs.

Near-term risks include a stronger dollar and any shift in Fed rhetoric that accelerates rate cut expectations, which could curb gold’s appeal. However, safe-haven demand tied to Trump’s tariff policies and global economic uncertainty continues to underpin the market. Traders will be closely watching Friday’s PCE inflation data for further direction, with a weaker-than-expected reading likely to reinforce gold’s bullish momentum.

More Information in our Economic Calendar.