Gold price hit new all-time highs of $3,500 on Tuesday, extending gains as the market remained skeptical of the global economic outlook amid US dollar weakness. The yellow metal has risen by more than 30% year-to-date, and will likely stay on the uptrend in the coming days if the current trade tariff impasse stays in place.
The momentum on gold price favours it to continue climbing in the coming days, helped by the weakening appeal of the US dollar. The DXY index, which measures the greenback’s strength against the euro, Japanese yen, British pound, Swiss Franc, Canadian dollar and Swedish krona, has declined to near three-year lows of 98.70 as of this writing.
US President Donald Trump’s charge at the Federal Reserve Chairman Jerome Powell to lower interest rates has the underpinnings of recession fears. That has elevated the demand for safe haven assets, which is supportive of gold price upside. Meanwhile, Trump stated last week that trade talks with China could potentially get traction in the next three to four weeks.
That timeline might be optimistic for countries that have imposed triple-digit trade tariffs against each other, but such is what it could take to slow down gold price upsurge. In addition, traders will be keenly following the progress of US-Iran trade talks for potential tailwinds.
Gold Price Prediction
Gold price pivots at $3,399 and the upside will likely continue if the price action stays above that level. With the buyers in control, the first resistance level could come at $3,455. However, extended bullishness could breach that level and test $3,510.
Alternatively, action could go to the downside if XAUUSD breaks below $3,399. That could see initial support established at $3,344. The upside narrative will be invalid if the price breaks below that level. Furthermore, such action could clear the path for an extended decline that could test $3,286.
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