Select Language

Gold Price Forecast: XAU/USD holds below $3,350 as trade war eases

Breaking news

Gold Price Forecast: XAU/USD holds below $3,350 as trade war eases

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.05.26 10:30
Gold Price Forecast: XAU/USD holds below $3,350 as trade war eases

update 2025.05.26 10:30

  • Gold price edges lower to $3,335 in Monday's Asian session. 
  • Trump set a July 9 deadline for a trade deal with the European Union. 
  • Renewed inflation concerns and recession fears might help limit the Gold's losses. 

The Gold price (XAU/USD) attracts some sellers to near $3,335 during the early Asian session on Monday. The de-escalation of the trade war provides some support to the yellow metal. The FOMC Minute will be the highlight later on Wednesday. 

On Sunday, US President Donald Trump said that he agreed to an extension on the tariff deadline on the European Union (EU) until July 9, rescinding his threat of a 50% tariff from June 1. The easing fears of a global trade war drag the precious metal lower. 

However, traders will closely monitor the developments surrounding US-Japan trade deals and other major economies' trade deals for fresh impetus. Any signs of escalating trade tensions could boost the safe-haven flows, benefitting the precious metal. 

Renewed inflation concerns and a US credit rating downgrade boost could underpin the Gold price. Moody's downgraded the US long-held 'Aaa' credit rating to 'Aa1.' The downgrade added fuel to a weakening US Dollar (USD) and lifted the USD-denominated Gold price. 

Jigar Trivedi, Senior Research Analyst at Reliance Securities, expects the rise in gold prices to continue into the month of June 2025. Trivedi emphasized key drivers like the US credit downgrade, continued Chinese central bank gold purchases, and trade tensions. 

Gold FAQs

Gold has played a key role in human's history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country's solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.


Date

Created

 : 2025.05.26

Update

Last updated

 : 2025.05.26

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Dow Jones Industrial Average rises following tariff walkbacks

The Dow Jones climbed alongside other major equities on Tuesday, with investor sentiment snapping back after last week's declines.
New
update2025.05.28 02:15

ECB's Nagel remains cautious on next rate move

Bundesbank President Joachim Nagel struck a measured tone on the path ahead for interest rates, saying it remains too soon to decide on a further cut next month.
New
update2025.05.28 01:57

ECB's Lane: We are in a zone of normal central banking

Philip Lane, the chief economist of the European Central Bank, indicated that although the majority of factors suggested a continued decline in euro area inflation, there were also concerns, such as the possibility of unsuccessful EU-US trade negotiations, that could lead to an increase in inflation
New
update2025.05.28 01:39

NZD/USD slips below 0.5950 as markets await RBNZ rate decision, Fed minutes

The New Zealand Dollar (NZD) is losing ground against the US Dollar (USD) on Tuesday, slipping back after a failed attempt to break above the key 0.6000 level.
New
update2025.05.28 01:32

Gold price plunges almost 2% on risk rally spurred by tariff delay

Gold prices posted losses of nearly 2%, falling below the $3,300 figure, as market participants cheered US President Donald Trump's decision to delay tariffs on European Union goods.
New
update2025.05.28 01:25

GBP/USD eases from three-year high as US Dollar steadies on trade hopes

The British Pound (GBP) edges lower against the US Dollar, retreating from a three-year high, with the GBP/USD pair trading around 1.3510 during the American session on Tuesday.
New
update2025.05.28 00:48

USD/INR edges higher as Rupee weakens on month-end Dollar demand, RBI rate cut bets

The Indian Rupee (INR) depreciates against the US Dollar (USD) on Tuesday amid month-end Dollar demand from importers and a steady Greenback.
New
update2025.05.27 23:26

US CB Consumer Confidence Index rose to 98.0 in May

- US CB Consumer Confidence Index rebounds in May.
New
update2025.05.27 23:05

AUD/USD slumps to near 0.6450 as progress in US-EU trade talks lifts US Dollar

The AUD/USD pair extends correction to near 0.6450 during North American trading hours on Tuesday from its six-month high of 0.6537 posted the previous day.
New
update2025.05.27 22:56

Fed's Barkin flags economic caution as inflation and fiscal strain linger

Richmond Fed President Thomas Barkin highlighted persistent uncertainty in the US economy, pointing to muted business activity, fiscal drag, and inflation expectations weighing on sentiment. While consumer spending remains resilient for now, policymakers are closely watching the evolving data.
New
update2025.05.27 22:55

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel