Gold (XAUUSD) Price Forecast: Rally Builds on Tariff Turmoil with $3,062.20 Breakout in Sight

Gold Prices Firm as Trade Tensions and Bond Market Rout Reinforce Safe-Haven Demand

Gold prices rose sharply on Wednesday, buoyed by escalating global trade tensions, a weakening U.S. dollar, and turmoil in the Treasury market. Spot gold is now testing resistance near $3,062.20, with traders watching for a potential breakout. On the downside, the 50-day moving average at $2,953.12 remains the key support level and a critical line for bearish acceleration if breached.

At 11:18 GMT, XAUUSD is trading $3050.58, up $68.33 or +2.29%.

Trump Tariffs Drive Safe-Haven Demand

Safe-haven buying intensified after U.S. President Donald Trump’s sweeping reciprocal tariffs took effect. The measures included a 104% duty on Chinese imports and new levies on goods from more than 180 countries.

China responded with 34% tariffs on U.S. goods, while Canada imposed 25% duties on American vehicles. Customs began collecting tariffs on 86 countries Wednesday, further fueling concerns of a global economic slowdown and recession. The renewed trade war backdrop has investors hedging risk with gold.

Dollar Weakness Adds Tailwind to Gold

The U.S. dollar index fell 0.7%, making gold more attractive to non-dollar holders. China’s central bank reportedly instructed major lenders to reduce dollar purchases, a move that may reflect efforts to curb yuan depreciation. As the greenback weakens and global trade uncertainty rises, gold continues to benefit from its safe-haven status and strong international demand.

Bond Market Stress and Fed Policy Outlook

U.S. Treasury yields spiked as markets reacted to weak demand at Tuesday’s 3-year note auction. The selloff is raising red flags over the reliability of Treasuries as a traditional safe haven.

Deutsche Bank strategist Henry Allen noted that the severity of the bond rout is fueling speculation the Federal Reserve may be forced to act to stabilize financial conditions—possibly through an emergency rate cut.

With nearly 60% of market participants now pricing in Fed easing as early as May, the outlook favors gold. Zero-yield bullion tends to outperform in falling rate environments, particularly when confidence in other safe assets erodes.

Gold Prices Forecast: Bullish Outlook as Safe-Haven Flows Intensify

Gold has gained over $400 year-to-date, hitting a record high of $3,167.57 on April 3. Gold-backed ETFs saw their strongest quarterly inflows in three years, according to the World Gold Council.

While CPI and PPI data due later this week may add short-term volatility, the broader setup remains bullish. Elevated geopolitical risk, Fed policy uncertainty, and weakening demand for Treasuries all point to sustained demand for gold.

A firm break above $3,062.20 could trigger renewed momentum toward new all-time highs.

More Information in our Economic Calendar.