Gold price forecast (XAU/USD) maintains its upward trajectory during the first half of the European session on Wednesday, trading above the $3,025 level. However, bullish momentum remains subdued. Market uncertainty over US President Donald Trump’s upcoming reciprocal tariff announcement on April 2 supports the safe-haven appeal of gold. Additionally, the Federal Reserve’s (Fed) projection of two 25-basis-point rate cuts this year further strengthens the non-yielding yellow metal.
Nevertheless, the US Dollar (USD) sees renewed buying interest after pulling back from a three-week high, preventing strong bullish moves in gold. Moreover, a generally positive risk sentiment limits the XAU/USD pair’s upside potential. Investors now turn to US Durable Goods Orders data for short-term market direction while keeping an eye on the US Personal Consumption Expenditure (PCE) Price Index release on Friday for further cues.
Market Drivers and Key Developments
- The US Dollar weakened after data on Tuesday revealed that the Conference Board’s US Consumer Confidence Index fell for the fourth consecutive month to a four-year low of 92.9 in March.
- The Expectations Index dropped to 65.2, its lowest in 12 years, signaling recession risks.
- The Federal Reserve recently downgraded its US growth outlook due to trade policy uncertainties, contributing to gold’s appeal.
- Reports indicate that upcoming US reciprocal tariffs on April 2 will be more targeted, reducing inflation concerns and allowing for additional Fed rate cuts, benefiting gold.
- Despite hawkish remarks from Fed Governor Kugler, market participants expect the Fed to cut rates in June, July, and October.
- The US imposed secondary tariffs on Venezuela, stating that any country purchasing oil or gas from Venezuela would face a 25% tariff when trading with the US.
- Trump is set to announce retaliatory tariffs on 15 major trading partners, creating further market caution.
- A Russia-Ukraine agreement to halt military strikes and China’s latest economic stimulus efforts are fostering a generally positive risk sentiment, limiting gold’s upside potential.
- Investors are awaiting US Durable Goods Orders data and speeches from key Federal Open Market Committee (FOMC) members for further insights into USD movement.
- The market focus remains on the US PCE Price Index, which could shape expectations for the Fed’s rate-cut trajectory and influence gold prices.
Gold Price Outlook: Key Support at $3,000 Holds the Key
From a technical perspective, gold price forecast resilience around the $3,000 level and its subsequent recovery indicate a bullish trend. Positive daily chart oscillators suggest the path of least resistance favors an upward movement. A sustained break above the $3,036 resistance level could reinforce this outlook and push XAU/USD toward its all-time high of $3,057-$3,058 recorded last week.
On the downside, the $3,000 mark remains a critical support level. A decisive break below this threshold could trigger technical selling, dragging gold toward the $2,982-$2,978 zone. Further selling pressure could push prices down to the next major support at $2,956-$2,954.
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