Gold price was marginally down in Wednesday’s European trading session, going for $2,934 after losing 0.02% at press time. Markets are still wary of a tariff war, with US President Donald Trump seemingly planning to impose additional tariffs against more nations. Also, January’s FOMC meeting minutes will be out today, and that could inject fresh volatility into XAUUSD.
Trump announced a new set of 25% tariffs targeting automobiles, semiconductors, and pharmaceuticals, which will likely come into force from April. This has added fuel to fears that the global economy could experience heightened instability. Consequently, the demand for safe haven gold is likely to rise significantly.
In its latest market outlook released on Tuesday, Goldman Sachs raised its gold price target from $2,890 to $3,100. The investment bank attributes this to increased demand by central banks, which it says could add a 9% premium on gold. This mirrors an earlier readjustment by UBS Bank, which set its target at $3,200.
On the downside, the tariff war ecosystem could keep inflation elevated and necessitate a higher-for-longer interest rate policy by the Federal Reserve. That could subdue gold price upside. Also, emerging geopolitical shifts in the Middle East and the Russia-Ukraine war could weigh down on the metal. Israel and Hamas ceasefire has remained stable, while US-led efforts to end the Russia-Ukraine war have calmed down the hostile rhetoric significantly.
Gold Price Prediction
On the chart below, gold price pivots at $2,927 and the upside will prevail if action stays above that level. The first resistance will likely be at $2,943, but a stronger momentum will break above that level and potentially test $2,960.
On the downside, going below $2,927 will signal a shift in the momentum to the downside. With that, the first support is likely to be at $2,912. Meanwhile, breaking below that level will invalidate the upside narrative. An extended control by the sellers could lead to further losses to test $2,900.
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