Gold (XAUUSD) Price Forecast: Poised to Extend Gains as Dollar Weakens, Powell Looms

Gold Prices Push Higher as Fed Tensions, Tariff Risks Undermine Dollar and Yields

Gold climbed to a five-week high Tuesday, building on Monday’s rally as falling Treasury yields and a weaker U.S. dollar offer tailwinds. Traders are preparing for high-impact remarks from Federal Reserve Chair Jerome Powell, whose speech later today could spark sharp repricing across assets. XAU/USD is currently eyeing resistance at $3,451.53—the June 16 swing high—with the all-time record at $3,500.20 now within reach.

At 12:44 GMT, XAU/USD is trading $3404.87, up $7.81 or +0.23%.

Federal Reserve Rift Draws Market Focus as Powell Takes the Stage

The spotlight is squarely on Powell’s 12:30 GMT speech, with traders eager to see whether he acknowledges growing internal calls for a rate cut. Fed Governors Waller and Bowman have both advocated for immediate easing, citing tariff-driven inflation as transitory.

However, markets are pricing just a 4.7% chance of a July cut, reflecting skepticism that Powell will deviate from the current 4.25%-4.50% rate range. Any tilt toward dovish language could hit the dollar and lift gold further.

Tariff Pressures Undermine Rate Cut Prospects, Support Gold’s Safe Haven Bid

The U.S. average effective tariff rate has surged to 22.5%, its highest since 1909, driving June CPI to 2.7% year-over-year. Powell previously stated the Fed would have already eased if not for tariff-induced inflation.

With core PCE still well above target, Powell faces a communications challenge: how to balance persistent inflation with weak Q1 GDP and slowing private sector job growth. This uncertainty is reinforcing gold’s role as a hedge as political and economic pressures intensify.

Dollar and 10-Year Yield Break Down Ahead of Fed Clarity

The U.S. Dollar Index has dropped to 97.86 after failing to hold the 50-day SMA at 98.60. Consecutive lower highs since April continue to weigh on sentiment.

Meanwhile, the 10-year Treasury yield is retreating, now at 4.37% and below the 50-day average, signaling reduced appetite for U.S. fixed income. As the yield slips toward the 200-day SMA at 4.36%, gold finds renewed buying interest from investors avoiding yield risk.

Gold Prices Forecast: All Eyes on $3,451.53 as Fed Volatility Looms

Technically, gold remains in a strong bullish structure with key support between $3,331 and $3,310. A sustained move above $3,451.53 would expose the $3,500.20 all-time high, especially if Powell strikes a dovish tone.

Even a balanced or cautious stance could keep the dollar under pressure given internal Fed discord. With risk premium rising ahead of the August 1 trade tariff deadline, the gold price forecast remains bullish for now, supported by both technicals and global dislocations.

More Information in our Economic Calendar.