Gold (XAUUSD) Price Forecast: Can Bulls Defend the 50-Day Moving Average?

Gold Pressured by Margin Call Selling and Powell’s Hawkish Tone

Gold prices came under heavy pressure on Monday, plunging to an intraday low of $2,970.21 before attempting a modest recovery. The early drop pushed prices below the key $3,000 psychological level and briefly under the March 21 swing low at $2,999.46. The sell-off was largely triggered by margin call liquidations as equity markets globally suffered steep losses following a renewed escalation in trade tensions.

At 10:22 GMT, XAU/USD is trading $3030.99, down $6.90 or -0.23%.

Stock Market Rout Triggers Margin Selling in Gold

Risk-off sentiment intensified after U.S. President Donald Trump announced sweeping new tariffs affecting over 180 countries, including a 54% total tariff rate on Chinese goods. Global equity markets sold off sharply, with Dow futures falling over 1,300 points and the 2-year Treasury yield plunging 16 basis points to 3.52%, the lowest since September 2022. The equity market collapse forced investors to cover margin calls, prompting gold liquidations despite the metal’s safe-haven appeal.

Hawkish Powell Dampens Rate Cut Hopes

Federal Reserve Chair Jerome Powell signaled a more cautious approach on rate cuts, noting that the inflationary impact of the tariffs could be more persistent than initially anticipated. While markets had priced in as many as five rate cuts this year, Powell’s emphasis on inflation control suggests the Fed may delay any easing. The hawkish tone put further downside pressure on gold, as the likelihood of near-term rate cuts diminished.

Central Bank Buying and Recession Risk Provide Underlying Support

Despite Monday’s sharp drop, gold remains supported by ongoing central bank purchases and growing recession fears. China added to its gold reserves for a fifth consecutive month, while Deutsche Bank upgraded its year-end gold price forecast to $3,350, citing macroeconomic headwinds and safe-haven demand. Additionally, real yields are expected to stay low, providing a longer-term bullish backdrop for gold.

Key Technical Levels in Focus

Technically, if Monday’s low at $2,970.21 holds, a recovery toward the pivot at $3,069.03 is possible. The 50-day moving average at $2,943.95 is now a critical level—if broken, traders will eye support near $2,880.25 and $2,832.72. So far, gold’s correction remains shallow, with the broader uptrend intact above the January trendline around $2,975.

Gold Prices Outlook: Cautiously Bullish With Key Support in Play

While margin call selling and Powell’s hawkish stance created short-term headwinds, the structural bullish case for gold remains intact. Supportive central bank flows, heightened geopolitical risk, and the potential for eventual Fed easing point to a recovery. Provided the 50-day MA holds, gold prices are likely to resume their uptrend, making dips a potential buying opportunity for traders.

More Information in our Economic Calendar.