Gold (XAUUSD) Price Forecast: Gold Slips as Greenback Bounces Off Session Lows

Gold Slips Below Key Levels as Dollar Firms and Risk Appetite Grows

Gold prices extended losses for a second session on Tuesday, falling over 1% as a strengthening U.S. dollar and easing geopolitical tension weighed on safe-haven demand. The retreat follows U.S. President Donald Trump’s shift to a softer stance on European trade tariffs, which has encouraged risk appetite in equities and diminished the immediate need for protection in bullion.

At 10:59 GMT, XAU/USD is trading $3294.12, down $48.35 or -1.45%.

Dollar Strength, Softer Trade Rhetoric Pressure XAU/USD

The U.S. dollar index reversed early losses to trade 0.3% higher, directly undermining gold’s appeal for non-dollar buyers. The uptick in the greenback coincided with Trump rolling back his threat of fresh tariffs on the EU. Instead of escalating tensions, he reinstated a July 9 deadline for trade talks, which fueled optimism in equity markets and weakened gold’s haven bid.

Ole Hansen of Saxo Bank noted that gold is under pressure from technical selling, with the metal trading below a descending trendline drawn from the April all-time high. “Reduced haven demand and rising stock markets are weighing on gold,” he said. This backdrop of declining geopolitical stress and a firmer dollar creates immediate resistance at Friday’s high of $3366.02, with downside pivots marked at $3310.48 and $3277.91.

Fed Speeches and Inflation Data Could Set the Next Move

Market focus is now shifting to upcoming speeches from Federal Reserve officials and Friday’s release of core PCE inflation data — a key input for rate decisions. Investors currently expect 47 basis points of rate cuts by year-end, likely beginning in October. A weaker inflation print or dovish commentary could reignite support for gold, as lower rates reduce the opportunity cost of holding non-yielding assets like bullion.

Rhona O’Connell of StoneX emphasized that gold remains in a consolidation phase. “The high is likely in, but uncertainty will keep prices supported,” she noted. Still, the technical structure suggests caution, particularly as price action nears the 50-day moving average.

Gold Prices Forecast: Test of Key Support May Define Bullish Structure

Technically, the most important level for traders is the uptrending 50-day moving average, now sitting at $3212.50. This indicator has underpinned the broader bull move. Notably, gold was nearly $500 above this average in April but has since narrowed the gap to just $80. With dual support zones at $3228.38 and $3166.46, a break below this area could threaten the longer-term bullish structure.

Unless rate cut expectations firm or inflation data disappoints, gold faces near-term bearish pressure. The test of the 50-day average will be critical — a hold may revive buying interest, but a breach could open the door to deeper losses. For now, traders should prepare for further downside pressure while watching Fed signals closely.

More Information in our Economic Calendar.