Gold Price Forecast: XAU/USD soars on geopolitical tensions, dovish Fed rate cut speculation

Source Fxstreet
  • Gold's rally fueled by increased geopolitical risks in the Red Sea region and a shift towards risk-averse trading.
  • US Producer Price Index data falls short of expectations, bolstering speculation of imminent Fed policy easing.
  • Decline in US Treasury yields and a mixed Dollar performance further support Gold's upward momentum.

Gold price rallied sharply on Friday, spurred by a risk-off impulse due to tensions arising around the Red Sea, as the US and the UK retaliated against Houthi's attack on a US ship on Thursday. Therefore, XAU/USD’s refreshed five-day highs at around $2062, and trades at $2045, up 0.70%.

XAU/USD hits five-day high at $2062, sponsored by mixed US data, increased odds for Fed rate cuts

Traders bought Gold due to the escalation of the conflict in the Middle East. Besides that, the yellow metal was boosted by the drop in US Treasury bond yields, as bets that the US Federal Reserve would cut rates aggressively beginning as soon as March increased.

In the meantime, the latest inflation report in the United States (US), revealed that prices paid by producers, also known as the PPI, slid below estimates, with the PPI monthly dropping -0.1%, below forecasts of 0.1%. In a year-over-year number, the PPI rose by 1%, below forecasts of 1.9%. Core PPI was unchanged at 0% compared with November’s data but below estimates, while year-over-year figures dipped below projections and the previous reading, from 2% to 1.8%.

Although today’s data is supportive of a dovish approach by the Fed, on Thursday consumer inflation data was higher than expected. It should be said that some Fed officials made comments on December’s data, and pushed back against expectations for a rate cut in March.

The yellow metal was also supported by the drop in US yields, particularly the short-end of the curve, with the 2-year Treasury note plunging almost ten basis points to 4.16%, reducing the US 2s-10s yield curve inversion. That weighed on the Greenback, which according to the US Dollar Index (DXY) clings to decent gains of 0.15%, up at 102.47.

XAU/USD Price Analysis: Technical outlook

Gold’s daily chart remains upward-biased after bouncing off the weekly lows of $2013, which exacerbated XAU’s rally toward the $2060 area, before sliding toward the 20-day moving average (DMA) at $2046. If buyers crack that level and the $2050 figure, that could open the door to retesting weekly highs. Further upside is seen at $2100. On the flip side, XAU/USD’s buyers' failure to reclaim $2050 could open the door for further losses. First support is seen at today’s low of $2028, followed by the week’s low of $2013.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Crypto Weekly Radar: All eyes on Donald Trump’s ultimatum, US macroeconomic dataCrypto markets begin the week with mixed sentiment, with Bitcoin (BTC) trading above $69,000 following last week’s rebound. Still, markets remain cautious as traders weigh risks stemming from Donald Trump’s renewed threats toward Iran ahead of the ultimatum set for Tuesday.
Author  FXStreet
10 hours ago
Crypto markets begin the week with mixed sentiment, with Bitcoin (BTC) trading above $69,000 following last week’s rebound. Still, markets remain cautious as traders weigh risks stemming from Donald Trump’s renewed threats toward Iran ahead of the ultimatum set for Tuesday.
placeholder
WTI eases below $103.50 as US, Iran reportedly seeking 45-day ceasefireWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.30 during the early European trading hours on Monday. The WTI price retreats after reports that the United States (US) and Iran are making a push for a 45-day ceasefire. 
Author  FXStreet
11 hours ago
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.30 during the early European trading hours on Monday. The WTI price retreats after reports that the United States (US) and Iran are making a push for a 45-day ceasefire. 
placeholder
Gold under pressure as fears mount, $4,600 support at risk Spot Gold gapped marginally lower at the weekly opening, with the XAU/USD pair battling to retain the $4,600 mark early in the Asian session.
Author  TradingKey
18 hours ago
Spot Gold gapped marginally lower at the weekly opening, with the XAU/USD pair battling to retain the $4,600 mark early in the Asian session.
placeholder
Gold Second-Quarter Outlook: Safe-Haven Failure or Pricing Logic Reshaping? Can Gold Enter a Major Rally?In the first quarter of 2026, gold prices experienced a classic "roller-coaster" ride. Against a macroeconomic backdrop of escalating geopolitical conflicts, gold prices briefly broke thr
Author  TradingKey
Apr 03, Fri
In the first quarter of 2026, gold prices experienced a classic "roller-coaster" ride. Against a macroeconomic backdrop of escalating geopolitical conflicts, gold prices briefly broke thr
placeholder
Spot Crude Oil Breaks $140. First Time Since 2008. Oil Market’s Most Severe Shock in History Is Here. On Thursday, April 2, Dated Brent crude prices reached $141.37 per barrel, the highest level since 2008, surpassing the peak set during the outbreak of the Russia-Ukraine conflict in 2022
Author  TradingKey
Apr 03, Fri
On Thursday, April 2, Dated Brent crude prices reached $141.37 per barrel, the highest level since 2008, surpassing the peak set during the outbreak of the Russia-Ukraine conflict in 2022
Related Instrument
goTop
quote