Gold Price Forecast: XAU/USD holds gains near $5,200 amid US-Iran tensions, trade uncertainty
- Gold price jumps to near $5,200 amid US-Iran tensions and uncertainty over the US trade policy outlook.
- US President Trump warns of military action if Tehran denies the deal.
- The US Supreme Court ruling against Trump’s tariffs has upended the trade policy outlook.
Gold price (XAU/USD) trades 0.6% higher to near $5,200 during the European trading session on Wednesday. The precious metal gains as tensions between the United States (US) and Iran over Tehran’s intentions to build nuclear infrastructure and uncertainty surrounding Washington’s trade policy have improved demand for safe-haven assets.
Safe-haven assets, such as Gold, perform better in a worsening geopolitical environment.
Meanwhile, investors await nuclear talks between the US and Iran, which are scheduled for Thursday, to get cues on how the Middle East situation will shape going forward. Ahead of the meeting, US President Donald Trump has also warned of military action in Tehran if it doesn’t drop its nuclear programme plans. Trump threatened Tehran through a post on Truth.Social on Monday that it will be a very bad day for the country and its people if they don’t reach a deal.
In the US, the Supreme Court’s (SC) ruling against additional duties imposed by Washington has upended the trade policy outlook. On Friday, the SC accused President Donald Trump of exceeding his authority to back his tariff agenda by invoking economic emergency powers.
Although US President Trump has announced 10% global tariffs to offset the SC’s verdict, which could be increased to 15%, and he has also warned of steeper tariffs in case countries dishonour trade deals, investors still worry that nations could demand deal revision.
Gold technical analysis
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XAU/USD trades higher to near $5,200 as of writing. The near-term bias is bullish as price continues to respect the rising support trend line from about $4,400 and holds well above the 20-day Exponential Moving Average near $5,010. The sequence of higher lows along this trend line keeps the uptrend intact despite recent volatility, while the EMA cluster under price confirms underlying demand on dips.
The 14-day Relative Strength Index (RSI) around 60.00 stays in positive territory, signaling sustained upside momentum rather than exhaustion after the earlier overbought readings have eased.
Immediate support emerges at the trend-line area around $5,120, followed by the 20-day EMA near $5,010 and then the recent reaction low at $4,880. A break below this support band would weaken the bullish structure and expose deeper retracements toward $4,750. On the upside, initial resistance sits near the recent peak at $5,240, and a daily close above this level would open the way toward the $5,380 region. As long as price holds above the EMA and the rising trend line, dips are positioned to attract buyers within the prevailing uptrend.
(The technical analysis of this story was written with the help of an AI tool.)
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.
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