Gold (XAU) Price Forecast: Will the Rally Extend Beyond $3,000 or Face a Pullback?

Gold Breaks $3,000 in Historic Safe-Haven Surge

Gold surged past the $3,000 mark for the first time on Friday, fueled by strong investor demand amid escalating economic uncertainty. The rally comes as U.S. President Donald Trump’s trade war intensifies concerns over global growth, triggering a flight to safe-haven assets. Gold has gained nearly 14% this year, driven by stock market volatility and expectations of central bank intervention.

Gold Maintains Strong Uptrend, Holding Above Key Support Levels

Technical indicators confirm gold’s sustained bullish momentum. The price action shows a well-defined uptrend, marked by a higher-high, higher-low pattern. After dipping to $2,832 in late February, gold rebounded sharply, making fresh highs. The chart also highlights the importance of the 50-day simple moving average (SMA) at $2,830, which has consistently provided major support. A sustained hold above this level reinforces the bullish outlook, while a breach could trigger a correction toward $2,790.

Central Banks and Fed Policy Support Gold’s Gains

Beyond technical strength, fundamental factors continue to support gold’s rally. Central banks, particularly China, have been aggressively accumulating gold reserves for four consecutive months, signaling a strategic shift away from the U.S. dollar. “Central banks continue record-level gold acquisitions, seeking to diversify away from an increasingly volatile U.S. dollar,” said GoldCore CEO David Russell.

Meanwhile, expectations of Federal Reserve policy easing have added to gold’s appeal. While the Fed is expected to keep rates unchanged at its upcoming meeting, traders are pricing in rate cuts later this year. A dovish stance would further weaken the dollar and support gold’s upward momentum.

Treasury Yields Rise on Inflation Concerns

Despite gold’s strength, U.S. Treasury yields climbed on Friday as investors digested fresh inflation data. The benchmark 10-year yield rose 3 basis points to 4.306%, while the 2-year yield jumped 6 basis points to 4.013%. A University of Michigan report showed consumer sentiment fell sharply in March, with inflation expectations rising to 4.9% from 4.3%.

Andrew Brenner of NatAlliance called the data “stagflationary,” suggesting that persistent inflation could complicate the Fed’s rate decision. If inflation remains elevated, gold may continue to benefit from hedging demand.

Gold Prices Forecast: Bullish Momentum Intact, But Watch for Pullbacks

Gold’s breakout above $3,000 is a major technical and psychological milestone. While the trend remains bullish, traders should watch for potential profit-taking. If gold holds above the 50-day SMA at $2,830, the rally could extend toward new highs. However, any resolution in trade tensions or a recovery in equities could slow momentum.

For now, safe-haven demand, central bank buying, and Fed policy expectations continue to support gold’s bullish outlook. Traders will closely monitor the Fed meeting next week for further direction.

More Information in our Economic Calendar.