Gold (XAUUSD) Price Forecast: Rally Breaks $3,300 on Safe-Haven Demand, Eyes $3,400 Next

Gold Prices Forecast: XAU/USD Breaks Record High on Safe-Haven Demand

Gold prices soared to a new all-time high of $3,319.60 on Wednesday, driven by a flight to safety as trade tensions between the U.S. and China escalated. The sharp rally negated Monday’s bearish reversal signal, reinforcing bullish sentiment and positioning the metal for further upside. Support has now shifted significantly higher, with the new pivot level marked at $3,137.91.

At 14:13 GMT, XAUUSD is trading $3308.94, up $79.14 or +2.45%.

U.S.-China Trade Tensions Ignite Flight to Safety

Market anxiety intensified after President Trump ordered an investigation into potential tariffs on all critical minerals imports, a direct move against China’s dominance in the sector. This development follows his administration’s recent 24% tariff on Japanese goods, highlighting a broader escalation in global trade disputes. Investors seeking shelter from policy risks quickly rotated into gold, as broader financial markets absorbed the impact of the renewed trade war narrative.

Dollar Weakness Adds Fuel to Gold’s Rally

The U.S. dollar extended losses and remains near a three-year low, further supporting gold’s rally. A weaker dollar enhances the appeal of gold to non-dollar holders, contributing to stronger inflows. As FXTM’s Lukman Otunuga noted, gold remains “heavily supported” by the ongoing dollar softness, alongside recession concerns and central bank interest.

Bond Market Moves Reflect Defensive Positioning

U.S. Treasury yields were mostly flat on Wednesday, following stronger-than-expected retail sales data, with the 10-year yield up slightly to 4.341%. However, recent downward pressure on yields, following a sharp selloff last week, reflects growing investor concerns. Speculation persists that China—holding $760 billion in Treasurys—may be quietly offloading U.S. debt. This adds to the case for gold, as investors hedge against potential instability in the bond market.

Retail Data Resilient but Overshadowed by Trade Risks

Despite upbeat March retail sales figures, which showed a 1.4% rise versus the 1.2% forecast, the trade war narrative continues to dominate sentiment. Ongoing tariff talks, including scheduled discussions between the U.S. and Japan, keep geopolitical risks front and center for traders.

Market Forecast: Bullish Gold Outlook Holds Above $3,137

The bullish momentum in gold remains intact as long as prices stay above the new pivot at $3,137.91. Strong buyer interest and safe-haven demand suggest any correction may be shallow.

With the metal now trading above key psychological levels, traders are eyeing potential targets at $3,400 and $3,500. Barring a resolution in trade tensions or a dramatic reversal in the dollar, gold prices are expected to maintain an upward bias.

More Information in our Economic Calendar.