Gold forecast: Cautious start to the week for XAU

Gold has started the new week on a more subdued note, following three consecutive sessions of losses at the end of last week. Prices ultimately slipped just under 0.4% last week, reflecting what has been a recurring theme of tepid trade. Indeed, the broader gold forecast remains somewhat rangebound, as investor attention turns increasingly towards equities, pushing global indices to fresh record highs.

 

Read out long-term H2 2025 gold forecast HERE.

 

Gold undermined by rallying equities

 

Although equity index futures have come sharply off their earlier highs, the broader trend has been quite strong lately. Driving this equity surge is renewed optimism surrounding international trade deals, several of which have been announced in recent weeks. Risk appetite has rebounded as a result, reducing immediate demand for safe-haven assets like gold. Compounding this is a firmer US dollar, which has staged a modest comeback, further pressuring the dollar-denominated metal.

 

Yet, despite this recent malaise, gold has not capitulated entirely. The inability to break to new highs in recent months suggests waning momentum, but also hints that a significant sell-off remains unlikely. Inflationary pressures — not least from Trump’s tariff regime and expansive fiscal agenda — continue to offer underlying support. This context informs a more nuanced gold forecast: while the upside is currently capped, the downside risk may be equally limited.

 

Transatlantic trade tensions and tech earnings in focus

 

On the macro front, trade developments are setting the tone. A major agreement between the EU and US has seen a sweeping 15% tariff imposed across a wide range of goods, alongside pledges from Brussels to purchase $750 billion in US energy and invest a further $600 billion. Notably, steel and aluminium remain outliers, still subject to a punishing 50% tariff — a decision likely to generate further political wrangling.

 

Meanwhile, the US and China appear set to extend their trade truce by 90 days. According to the South China Morning Post and Reuters, fresh negotiations are slated to resume imminently in Sweden. These developments could temper short-term volatility and influence the gold forecast indirectly by impacting broader risk sentiment.

 

Looking ahead: Fed commentary and us economic data

 

All eyes will be on the Federal Reserve’s policy meeting, on Wednesday. No one is expecting a rate cut, but markets will be parsing every syllable of Fed Chair Powell’s remarks for clues on future monetary policy. With sticky inflation and firmer data recently, the path forward remains contested.

 

Beyond the Fed, investors face a scatter of key economic indicators, from GDP to jobs numbers this week. These data points will provide further clarity on the strength of the US economy and the timing of any potential policy pivots — developments that could directly shape the gold forecast in the weeks ahead.

 

Adding to the mix are earnings reports from tech giants including Amazon, Apple, Meta, and Microsoft. Given their outsized influence on market sentiment, any surprises here could trigger knock-on effects across asset classes, including gold.

 

Technical gold forecast: XAU/USD testing bullish trendline

 

 

From a technical perspective, gold’s long-term chart remains constructive, but confidence is beginning to waver. The yellow metal is once again hovering around the key 2025 bullish trendline, currently situated in the $3,320–$3,330 region. A decisive break below this could signal the start of a more volatile phase and alter the near-term gold forecast significantly.

 

Immediate support lies at $3,300 — a level that has held firm in recent times. Below that, the June low of $3,247 emerges as the next key marker. On the upside, resistance is layered at $3,350, $3,385, and $3,430. Bulls will need to clear these hurdles to entertain any thoughts of reclaiming the highs seen earlier in the year.

 

In short, the broader gold forecast remains delicately balanced. Macroeconomic headwinds — from a stronger dollar to rising risk appetite — have capped upside momentum. However, structural inflation concerns, and persistent geopolitical tensions offer a cushion of support. With technical levels being tested and critical data due this week, gold’s next major move may soon be upon us.

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R