Gold price forecast: XAU steadies above $4,110 as safe-haven demand revives after steep selloff

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Gold steadies above $4,110

Highlights

- Gold rises above $4,110 after two days of steep declines.

- Geopolitical tensions and Fed rate-cut bets support prices.

- Key support sits near $4,040, with resistance at $4,200.

The rebound followed a wave of risk aversion across global markets, sparked by reports that Washington may impose new software export restrictions on China. President Donald Trump later reassured investors that his planned meeting with Chinese President Xi Jinping remains on track, easing fears of an immediate escalation in trade frictions. Still, the headlines added to broader geopolitical jitters, particularly after new U.S. sanctions on Russia were announced following the postponement of a Trump–Putin summit.

This renewed uncertainty revived demand for traditional safe-haven assets such as gold, even as prices remain roughly 6% below the record highs hit earlier this month. The pullback has largely been attributed to profit-taking after an extended rally, but analysts note that underlying demand for defensive positioning remains intact.

Expectations of further monetary easing also played a key role. Markets are pricing in two additional rate cuts by the Federal Reserve before year-end, which could weaken the dollar and real yields—typically supportive conditions for gold. Lower rates reduce the opportunity cost of holding non-yielding assets, helping offset the drag from recent profit-taking.

Technical view: Support levels hold firm

From a technical perspective, gold’s broader uptrend remains intact despite recent volatility. The metal found strong support near $4,044, aligning with the rising trendline and 20-day exponential moving average. This $4,040–$4,060 zone now serves as the key short-term floor. A sustained defense of this area suggests buyers are still active, with momentum likely to stabilize if the market avoids a decisive break lower.

Gold price forecast (Source: TradingView)

If selling pressure intensifies, the next support level sits at the 50-day EMA around $3,819, followed by $3,610 at the 100-day EMA. On the upside, resistance is seen near $4,200, with the previous peak around $4,350 acting as a major ceiling. A breakout above this zone would reestablish bullish momentum and set up a potential move toward the $4,500 channel target.

Outlook

As discussed in earlier analyses, gold’s rally has been fueled by a mix of macro uncertainty, central bank policy expectations, and strong institutional flows. The latest correction appears to be a natural cooling phase rather than a structural reversal. The $4,040–$4,060 range now represents a critical test for bulls; holding this base could invite renewed buying, especially if Friday’s U.S. CPI report signals easing inflation pressure.

Should the Fed reinforce a dovish stance in upcoming remarks, the medium-term bias remains skewed to the upside. Conversely, stronger inflation or hawkish commentary could spark a short-term retest of lower supports. For now, gold’s ability to stabilize above $4,100 highlights resilient safe-haven demand amid a volatile global backdrop.

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