Gold (XAU) Price Forecast: Bullish Momentum Builds as Recession Fears Grow

Safe-Haven Demand Builds as Recession Fears Mount

Gold prices are edging higher for a second straight session, bolstered by renewed safe-haven demand as market sentiment sours on growing recession expectations and political risk. The yellow metal continues to attract inflows, with traders eyeing critical pivot levels while U.S. economic uncertainty escalates under Trump’s aggressive trade stance.

At 10:39 GMT, XAU/USD is trading $3022.16, up $2.07 or +0.07%.

Trump Tariffs Spark Policy Concerns, Lift Gold

Markets remain on edge following comments from former President Trump, who signaled that automobile tariffs are imminent and that not all trade measures will be enforced immediately.

While details remain unclear, the unpredictability of trade policy has already dampened business confidence. According to CNBC’s CFO Council survey, 60% of corporate CFOs expect a U.S. recession by year-end, a sharp rise from just 7% last quarter. Trade tensions top the list of external risks, followed closely by inflation and weakening demand.

This policy instability has triggered a pullback in equity appetite, with 90% of CFOs forecasting the Dow will retest the 40,000 level. Capital expenditure plans have also been curtailed, further supporting the appeal of gold as a defensive asset.

Fed Outlook Supports Bullion Amid Inflation Concerns

Gold has gained over 15% year-to-date and recently hit an all-time high of $3,057.21 per ounce on March 20. Although the Federal Reserve left interest rates unchanged last week, dovish guidance points to possible cuts later this year. Fed Governor Adriana Kugler noted inflation progress has stalled, reinforcing expectations for prolonged rate accommodation.

Markets are now awaiting the U.S. Personal Consumption Expenditures (PCE) data on Friday. A soft reading could accelerate rate cut bets, potentially extending gold’s rally. With bullion thriving in low-rate environments, any dovish surprise in the data will likely drive further buying.

Gold Technicals Watch: Key Pivots in Play

Gold is currently trading near a key technical pivot at $3,028.53. A sustained move above this level would refocus attention on the record high at $3,057.59. Conversely, failure to hold could trigger a pullback toward $2,999.46 or deeper to $2,968.92. ANZ forecasts gold at $3,200 by September, contingent on rate policy and risk sentiment.

Gold Market Outlook: Bullish Bias Holds

With escalating policy risk, weakening consumer confidence, and growing consensus on a pending U.S. recession, investor preference is tilting firmly toward gold and other safe assets. ETF inflows and central bank demand remain supportive. Unless Friday’s inflation data surprises hawkishly, the path of least resistance remains higher, keeping the gold prices forecast bullish in the near term.

More Information in our Economic Calendar.