Gold (XAU) Price Forecast: Record Highs in Sight as Safe-Haven Demand Surges

Prices Hold Near Record Highs as Trump Tariff Uncertainty Fuels Safe-Haven Demand

Gold prices edged higher on Tuesday, trading just below their all-time high of $2,942.78, as investors sought safe-haven assets amid renewed concerns over U.S. trade policy. Despite five sessions of sideways action, traders appear to be establishing a higher support base around $2,888.52, reinforcing the bullish momentum.

With the uptrend firmly intact, downside risks remain a key focus. Dip buyers are closely watching potential support levels at $2,857.49 and $2,836.67. If prices pull back to these levels, traders may step in to defend the trend. On the upside, there is no clear resistance ahead, meaning a breakout above $2,942.78 could trigger another sharp rally into uncharted territory.

At 11:39 GMT, XAU/USD is trading $2912.70, up $14.21 or +0.49%.

Trump’s Tariff Moves Drive Gold Demand

Gold’s strength is being fueled by uncertainty surrounding President Donald Trump’s aggressive trade policies. Since returning to office, Trump has introduced new tariffs and hinted at further reciprocal measures against countries that impose duties on U.S. goods. This disruption to global trade is stoking economic concerns and sending investors into gold as a hedge against uncertainty.

According to analysts at Commerzbank, central bank demand continues to underpin gold, even in the absence of fresh buying data. Additionally, heightened risk-off sentiment is keeping gold well-supported, with traders factoring in the potential for more trade-related volatility in the months ahead.

Fed Rate Cut Speculation Adds to Bullion’s Strength

Investors are also eyeing the U.S. Federal Reserve’s upcoming January meeting minutes for insights into future monetary policy. Market expectations for a Fed rate cut in 2025 have strengthened, especially after last week’s weaker-than-expected U.S. retail sales data. Lower interest rates tend to boost gold’s appeal by reducing the opportunity cost of holding the non-yielding asset.

“Price gains are also supported by growing expectations that the Fed will cut rates in 2025,” said Ricardo Evangelista, senior analyst at ActivTrades. If rate-cut bets gain further traction, it could provide an additional tailwind for gold prices.

Goldman Sachs Raises Gold Price Target to $3,100

Goldman Sachs has lifted its year-end price target for gold to $3,100 per ounce, up from a previous forecast of $2,890. The bank cites “structurally higher” central bank demand and increased speculative positioning as key drivers.

However, the firm also noted that heightened policy uncertainty—particularly concerns over Trump’s tariffs—could push gold as high as $3,300 by the end of the year if safe-haven demand remains elevated. With gold already up 9.7% year-to-date at $2,925 an ounce, the bullish outlook remains intact.

Gold Prices Forecast: Breakout Potential Remains Strong

With gold hovering near record highs and risk sentiment tilted in its favor, the outlook remains bullish. The market is well-supported by central bank buying, geopolitical uncertainty, and expectations of Fed rate cuts.

A sustained move above $2,942.78 could open the door to a rally toward $3,000 and beyond. Conversely, traders will be monitoring key support levels for potential dip-buying opportunities. As long as safe-haven demand persists, gold is likely to remain well-positioned for further gains.

More Information in our Economic Calendar.