Gold (XAUUSD) Price Forecast: Breakout Above $3366.02 Targets Next Resistance at $3435.06

Gold Surges as Safe-Haven Demand Builds on Tariffs and Geopolitical Tensions

Gold prices rallied sharply on Monday, breaking above key resistance at $3310.48 and eyeing the next upside target at $3366.02. A breach of that level could open the door to $3435.06, just below the all-time high of $3500.20.

The surge comes as traders pile into safe-haven assets, driven by a cocktail of geopolitical tension, trade policy risks, and market unease ahead of Federal Reserve Chair Jerome Powell’s speech.

At 11:43 GMT, XAUUSD is trading $3357.45, up $67.75 or +2.06%.

Ongoing U.S.-China Trade Strain Fuels Gold Bid

Gold’s strength was underpinned by renewed trade hostilities between the U.S. and China. President Trump announced plans to double tariffs on steel and aluminum imports to 50%, reigniting fears of a trade war after Beijing hit back at allegations of violating mineral export agreements.

With both sides accusing each other of breaching the Geneva trade accord, market participants are bracing for prolonged trade disruptions. The uncertainty has put upward pressure on gold and downward pressure on the U.S. dollar, which dropped 0.6% against a basket of currencies.

Geopolitical Risks in Europe Add to Safe-Haven Flows

Tensions between Russia and Ukraine also contributed to gold’s appeal. Intensified military actions from both sides—just before scheduled peace talks in Istanbul—have amplified risk-off sentiment. The flight to safety has pushed gold above a one-week high, as investors look to hedge against broader geopolitical fallout.

Bond markets also reflected the unease, with the U.S. 10-year yield ticking up to 4.434%, while the 30-year yield rose more than 3 basis points to 4.967%, highlighting inflation and policy uncertainty.

Dollar Weakness and Policy Risk Support Bullion

Beyond trade and war concerns, the dollar’s recent softness has reinforced gold’s upside. The greenback has surrendered gains from the previous week, weighed down by tariff-related stagflation fears and concerns over the U.S. fiscal outlook.

The Commerce Ministry of China called the tariff accusations “groundless,” vowing countermeasures, which further dented sentiment around the dollar. A weaker dollar typically benefits gold by making it cheaper for non-dollar holders.

Powell Speech Looms Large for Rate Outlook and Gold Prices Forecast

All eyes now turn to Fed Chair Jerome Powell, set to speak today at 1:00 PM ET. Markets expect Powell to stick with a “wait-and-see” stance, maintaining the 4.25%–4.50% interest rate range.

However, given Trump’s pressure for cuts and the potential for weak jobs data later this week, traders will be scrutinizing any hints of dovish pivot. Equity markets are already under pressure—S&P futures are down 0.53%—and a cautious Powell could further drive gold demand.

Market Forecast: Bullish Outlook for Gold Prices

With tariff tensions escalating, safe-haven flows intensifying, and Fed flexibility in question, the near-term outlook for gold remains bullish. A breakout above $3366.02 could set the stage for a test of $3435.06, especially if Powell delivers a cautious tone or jobs data disappoints. Traders should monitor dollar movement and rate expectations closely, as both will shape gold prices projections in the sessions ahead.

More Information in our Economic Calendar.