Gold (XAUUSD) Price Forecast: Is the Buy-the-Dip Strategy About to Be Put to the Test?

Weekly Loss Fails to Dull Bullish Case as Inflation and Fed Clarity Await

Gold was set to extend its winning streak to five weeks before sharp liquidation on Friday flipped the market lower. XAU/USD settled at $3,037.88, down 1.54% for the week, as investors sold bullion to cover margin calls following a violent selloff in equities. Despite the setback, the macro environment—marked by trade war escalation, rising recession risk, and central bank gold accumulation—continues to offer strong fundamental support.

Margin Pressure Halts the Rally but Not the Narrative

The sharp reversal came after gold surged to an all-time high of $3,167.84 earlier in the week, driven by safe-haven inflows as President Trump announced sweeping new tariffs. China’s retaliation with 34% duties on U.S. goods accelerated fears of a global recession. When equities broke down, investors turned to gold for liquidity. Forced selling spilled into precious metals, cutting short the rally.

However, this type of pressure is viewed as mechanical rather than sentiment-driven. Gold remains up over 15% this year, supported by record central bank buying, strong institutional interest, and ETF inflows. The pullback may prove temporary unless supported by fresh macro shifts.

Trade Policy Uncertainty and Recession Fears Still Dominate

The underlying drivers of the rally are unchanged. Allianz’s Mohamed El-Erian now puts U.S. recession odds at 50%, while Goldman Sachs raised its estimate to 35%. Fed Chair Jerome Powell warned that Trump’s tariffs are “larger than expected,” with fallout likely to include both slower growth and elevated inflation. With global supply chains under renewed stress, gold’s role as a hedge remains central.

Next Week Brings CPI and Fed Minutes Into Focus

Traders will be glued to Wednesday’s FOMC minutes and Thursday’s CPI report. If the Fed minutes show internal debate or reluctance to ease aggressively, that could temper some of the rate-cut enthusiasm priced into markets. Conversely, if CPI surprises to the upside, it would reinforce inflation risks and justify gold’s safe-haven appeal—even if policy remains cautious. On Friday, consumer sentiment data could further illuminate how recent market stress is filtering through to inflation expectations.

Gold Prices Projection: Pullback Offers Opportunity as Macro Drivers Remain Supportive

The weekly loss does little to change the broader bullish narrative. The selloff was driven more by equity margin pressure than a shift in gold fundamentals.

Unless CPI comes in unexpectedly soft and the Fed signals a hawkish pivot—which appears unlikely—gold remains fundamentally supported. Persistent inflation risk, unresolved trade tensions, and heightened recession odds should continue to attract capital into bullion.

A dovish read of the FOMC minutes or an uptick in CPI could quickly reignite buying interest. Traders should view dips as strategic entry points. With inflation running hot, growth outlook deteriorating, and the Fed boxed in, gold retains strong upside potential over the coming weeks. The rally may have paused, but it has not reversed.

Technically, if traders are still in “buy the dip” mode then a test of pivot price support at $3000.28 could bring in a new round of buyers.

If $3000.28 is taken out with conviction then that will put another pivot at $2852.34 on the radar.

Shorting is a risky strategy, but if it suits your style then your exit has to be over $3167.84, with your first objective $3000.28, your second objective $2852.34 and your major objective the uptrending 52-week moving average at $2601.40.

More Information in our Economic Calendar.