Gold prices traded mostly flat today before turning positive in the afternoon trading. The fact prices haven’t fallen is interesting in itself given that geopolitical risks have clearly eased following Donald Trump’s latest U-turn on tariffs. In theory, that should have taken some of the shine off safe-haven assets. But gold hasn’t really flinched. So, what’s going on? On the surface, some of it comes down to the US dollar. The greenback has been drifting lower across the FX space, and that’s giving gold a natural tailwind. A weaker dollar makes gold cheaper for non-US buyers. Still, it feels like there’s more to this move than just currency effects. Indeed, gold priced in the pound (XAU/GBP) and the euro (XAU/EUR) also gained ground. Perhaps there’s something bigger. Could it be the growing sense of unease around global bond markets, particularly in Japan? Japanese government bond yields have pushed into multi-decade highs, while the yen has been sliding to fresh lows against several major currencies, including the euro. That combination is starting to make investors nervous, especially those watching for potential stress points in the global financial system.
Safe-haven demand hasn’t really gone away
Over the past few days, gold’s price action has been textbook safe-haven behaviour. The metal was printing fresh record highs almost on a daily basis as risk appetite soured in response to Trump’s short-lived tariff threats. Even though those fears have faded for now, gold has managed to hold on to most of its gains. That tells you something important. Underlying demand for protection is still there. Confidence in US dollar and bonds look a bit shaky. Investors may not be in full panic mode, as evidenced by the stock market rebound, but they’re clearly not feeling relaxed either.
Momentum is doing a lot of the heavy lifting
Another key part of the story in this gold forecast is technical momentum. Gold is in a very strong uptrend, and that alone attracts buyers. A lot of traders are simply following the trend, buying dips and expecting the rally to extend further.
As long as that behaviour continues, it’s hard to argue against higher prices in the near term. From a psychological point of view, the $5,000 level is starting to come into focus. It may sound ambitious, but given how persistent the buying has been, it’s no longer an outlandish target.
That said, I do think a correction is inevitable in the not-too-distant future. Once investors start paying closer attention to the macro picture again – growth, inflation, and especially real yields – gold could struggle to justify these levels. It’s something I’ve already touched on in my longer-term 2026 gold forecast, and it still feels relevant here.
The next immediate upside gold price target is at $4,900, before the focus turns to $5,000 next. Key support is now seen between $4,500 to $4550. Above these, there are lots of short-term levels to watch too including for example $4621, $4690 and $4800.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
