Gold (XAU) Price Forecast: Bulls Eye $3,000 as Weaker Dollar Fuels Market Rally

Gold Trades Near Record High

Gold prices edged higher on Monday, recovering from Friday’s sell-off and positioning for a potential test of last week’s record high of $2,954.96. A breakout above this level would signal a resumption of the uptrend, bringing the $3,000 psychological level firmly into focus.

However, a pullback below the minor bottom at $2,916.82 could shift momentum to the downside, with immediate support at the 50% pivot of $2,909.64. Failure to hold this level may trigger a deeper correction toward $2,864.33.

At 12:07 GMT, XAU/USD is trading $2946.76, up $10.50 or +0.36%.

Weaker U.S. Dollar Supports Gold Prices

The U.S. dollar index dipped on Monday, making gold more attractive to holders of other currencies. The greenback’s weakness, coupled with strong inflows into bullion-backed exchange-traded funds (ETFs), has helped sustain gold near its historic highs. The dollar has dropped over 3% from its January peak, driven partly by investor skepticism over U.S. President Donald Trump’s tariff threats, which have yet to fully materialize.

Market Eyes U.S. Economic Data for Fed Clues

This week’s U.S. economic calendar is packed, with key data points including the Chicago Fed National Activity Index and the Dallas Fed Manufacturing Index on Monday, followed by housing market indicators such as the S&P CoreLogic Case-Shiller National Home Price Index on Tuesday.

However, the market’s primary focus will be Friday’s Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure. The PCE data could heavily influence expectations around the Fed’s next move, with traders currently anticipating a rate cut in September.

Treasury Yields Rise as Investors Await Key Inflation Data

U.S. Treasury yields ticked higher as investors prepared for the economic data releases. Higher yields can weigh on non-yielding assets like gold, but ongoing uncertainties and U.S. growth concerns have so far kept safe-haven demand strong. Recent comments from Fed Chairman Jerome Powell suggest that further rate cuts might not be imminent, adding to market uncertainty.

Gold Market Forecast: Bullish Outlook Holds

Gold’s bullish momentum remains intact as long as prices hold above key support at $2,909.64. The weaker dollar, trade war fears, and potential volatility from U.S. economic data create a favorable environment for gold bulls.

A sustained break above $2,954.96 could accelerate gains toward the $3,000 mark, while a dip below $2,916.82 might trigger short-term selling pressure. However, unless economic data surprises to the upside and strengthens the dollar significantly, gold’s safe-haven appeal is likely to keep prices well-supported.

More Information in our Economic Calendar.