Gold (XAUUSD) Price Forecast: Gold Price Set for $5250 Breakout as War Risk Intensifies

Spot Gold Eyes One-Month High as Middle East Tensions Escalate

Spot Gold is edging higher on Friday with the market rapidly approaching its one-month high at $5250.00. The daily chart pattern suggests that this price is the gateway to an acceleration to the upside and a reintroduction with the all-time high at $5602.23. At the same time, after five straight days of testing, key support appears to have been firmly established at $5143.89. With the setup intact, traders are now awaiting the catalyst that could launch an impressive rally.

At 14:35 GMT, XAUUSD is trading $5230.58, up $45.40 or +0.88%.

Iran Talks Fail to Reach a Deal as Trump’s Window Opens

The traditional fundamentals appear to have taken a backseat at this time with all eyes focused on the Middle East where time is of the essence after Iran and the United States failed to reach a nuclear agreement on Thursday, a key deadline for President Trump. This move opens the door for a potential military strike against Iran with Trump’s 10-to-15-day window of time, where “very bad things” will happen, hitting this weekend.

A Little Show of Force May Be the Next Move

With Trump rattling his saber late Thursday by announcing the sending of additional troops to the region, tensions are actually escalating, in my opinion, despite the extension of the negotiations into next week. The way I see it, the three navy fleets off their coast brought Iran to the table, and after three rounds of meetings, I believe a little show of force may be in the cards to get Iran to actually agree to a deal. Trump probably does too especially since he doesn’t strike me as a very patient man.

Gold Is a Demand-Driven Investment, Not a War Trade

So what’s it all mean for gold? Trading 101 says gold is a safe-haven instrument and traders are supposed to buy it for protection during geopolitical upheaval as if it will suddenly become some universal currency if a World War breaks out. As a technician, I can see it’s in an uptrend and forming a breakout pattern, but from the fundamental side, gold sat in nearly a 40-year range before it finally broke out to new all-time highs in 2025, and I believe during that time period, we had quite a few big wars and prices remained rangebound.

You can believe whatever you want to be the driver of the price action, but personally, I think gold is an investment and goes up when there is demand and down when demand goes down and supply goes up. Let’s just call it a long-term demand driven rally, underpinned at this time by short-term political issues.

$5250 Is the Breakout Level. Quality of the Move Will Matter.

Technically, whether the market challenges the all-time high over the near-term will be determined by how it breaks out over $5250.00. New buyers on big volume will be the best scenario, short-covering will be the weakest because they tend to collapse without new money to support the move.

Minor support is the retracement zone at $5143.89 to $5002.31. This is a good area to accumulate gold. So if it sits inside this range, waiting for a catalyst then so be it.

Meanwhile, value seekers looking for a relatively good price with strong upside potential are probably eyeing the 50-day moving average at $4795.22 as a good price to start the next bullish campaign.

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