Gold (XAUUSD) Price Forecast: Dollar Rebound Stalls Gold Rally Short of $3400

Gold Slips as Dollar Rebounds, but Key Technical Levels Hold Firm

Gold prices edged lower Tuesday, retreating from a near four-week high of $3392.31 as the U.S. dollar rebounded and traders booked profits following Monday’s strong session. The pullback reflects renewed caution as markets weigh global trade tensions and await further signals from the Federal Reserve and upcoming U.S. jobs data.

At 11:45 GMT, XAUUSD is trading $3358.19, down $23.68 or -0.70%.

Dollar Strength, Trade Tensions Create Headwinds

The U.S. Dollar Index (DXY) bounced off a multi-week low, dampening gold’s early momentum. A stronger greenback typically pressures dollar-denominated assets like gold, making them less attractive to overseas buyers. This slight uptick in the dollar came as traders factored in heightened geopolitical risk and renewed uncertainty over global trade policy.

A potential call this week between U.S. President Donald Trump and China’s Xi Jinping is drawing attention, following Trump’s accusations that China breached prior trade commitments. The White House confirmed the call is likely, injecting new volatility into risk assets. Additionally, the Trump administration is pressing for trade offer submissions by Wednesday, seeking to fast-track negotiations.

The European Commission responded to Trump’s plan to double U.S. tariffs on steel and aluminum, urging a rollback. Meanwhile, the OECD downgraded its global GDP growth forecast to 2.9% for 2025 and 2026, citing weaker-than-expected momentum in developed economies and trade disruptions.

Technical Levels Draw Trader Interest

Despite Tuesday’s pullback, gold remains above key technical support zones. Immediate downside support lies at $3310.48 and $3277.91, with major support anchored at the rising 50-day moving average near $3242.10. On the upside, a break above $3392.31 could reignite bullish momentum toward the May 6 high at $3435.06, with a further target at $3500.20 if buyers regain control.

Ole Hansen of Saxo Bank highlighted that gold’s recent strength was “bolstered by a weaker dollar and renewed demand for alternative investments,” but also noted some light profit-taking was expected after Monday’s rally.

Gold Prices Forecast: Consolidation Before Possible Breakout

Gold remains technically supported, but the near-term direction will hinge on this week’s U.S. non-farm payrolls data and comments from Federal Reserve officials. With expectations for slowing global growth and persistent geopolitical risk, gold retains a bullish undertone—provided it holds above key support levels and reclaims $3392.31.

Unless the dollar rallies aggressively or Fed rhetoric turns decisively hawkish, gold prices projections favor another test of resistance near $3435. A confirmed breakout could set the stage for a move toward $3500.

More Information in our Economic Calendar.