Gold (XAU) Price Forecast: Safe-Haven Demand Surges on Trade War and Inflation Fears

Gold Hits Record High as Trade War Fears and Inflation Concerns Stoke Safe-Haven Demand

Gold soared to fresh all-time highs last week, fueled by mounting fears of a global trade war and rising inflation expectations. Traders piled into the safe-haven metal as President Donald Trump’s renewed tariff threats rattled markets, raising concerns over economic stability and future rate policy.

Are Tariffs the New Inflation Trigger?

Trump’s proposed round of reciprocal tariffs, expected to be unveiled April 2, has stirred expectations of inflationary pressures across the economy. Fed officials are split: Boston Fed’s Susan Collins sees a temporary inflation bump, while St. Louis Fed’s Alberto Musalem warned of persistent pricing pressure, estimating a full percentage point could be added to core inflation. Traders are increasingly pricing in these risks, with the latest PCE data showing a 0.4% monthly rise, slightly above expectations.

Gold rallied sharply on the back of these developments, touching a record $3,086.97 and posting its fourth straight weekly gain. The inflation hedge narrative is reasserting itself as real yields stay low and macro uncertainty increases.

Fed Stance Offers Little Relief for Bears

The Federal Reserve held rates steady and signaled a dovish tilt, with futures pricing in 63 basis points of cuts by year-end. Policymakers, including Governor Adriana Kugler and Richmond Fed’s Thomas Barkin, noted stalled progress on inflation and policy visibility. Traders remain focused on the Fed’s next move, but the hotter-than-expected PCE data will likely delay immediate action, keeping real yields compressed—a bullish backdrop for bullion.

Geopolitical and Recession Risk Deepen Bullion Appeal

Markets are also reacting to geopolitical uncertainty and growing recession expectations. A CNBC CFO Council survey shows 60% of U.S. CFOs now expect a recession by year-end, up from just 7% last quarter. Trade tensions top their concerns, followed by inflation and declining demand. Equity risk appetite is fading, with only 35% of CFOs planning increased capex, reinforcing gold’s role as a defensive asset.

Gold Prices Forecast: Fundamentals Point to Ongoing Safe-Haven Demand

With tariff-driven inflation concerns building, recession fears growing, and the Fed maintaining a cautious stance, the fundamental outlook for gold remains supportive. Geopolitical risk, weak business sentiment, and policy uncertainty continue to drive safe-haven demand. Unless macro conditions improve materially, the fundamental case for gold stays strong going into next week.

Technically, there is no resistance at all-time highs so the market is expected to push higher through $3086.97 next week. Nonetheless, it can get overheated, which will make it vulnerable to a near-term break.

The nearest support is a minor pivot at $2959.84. The next support zone is $2832.72 to $2811.91. The major support remains the 52-week moving average at $2587.79.

Even with the trend up and no resistance, the greater risk is buying strength. And as long as the 50-week moving average remains intact, the market will remain in buy the dip mode.

More Information in our Economic Calendar.