Gold Price Prediction: Is $3,400 Next as Dollar Weakens and Risks Mount?

Gold rose nearly 1% on Wednesday, climbing to $3,393 before easing back to test support near $3,364, as investors absorbed...

Written by: Arslan Butt • Thursday, June 5, 2025 • 2 min read

• Last updated: Thursday, June 5, 2025

Quick overview

Gold rose nearly 1% to $3,393 before testing support near $3,364 amid weak U.S. economic data and geopolitical tensions.
The U.S. Dollar Index's 0.5% drop made gold more attractive to foreign buyers, while lower Treasury yields enhanced its safe-haven appeal.
Technical indicators suggest that gold's uptrend remains intact, but a close below $3,350 could lead to further declines.
Market sentiment is cautious ahead of the U.S. payrolls report, with $3,400 identified as a key psychological level for gold.

Gold rose nearly 1% on Wednesday, climbing to $3,393 before easing back to test support near $3,364, as investors absorbed a mix of weak U.S. economic data and growing geopolitical stress. A 0.5% drop in the U.S. Dollar Index (DXY) made gold more appealing to foreign buyers, while 10-year Treasury yields ticked lower, further boosting bullion’s safe-haven appeal.

Traders reacted sharply to the ISM non-manufacturing PMI, which fell to 49.9—signaling contraction in the U.S. services sector for the first time in a year. Paired with an ADP jobs report showing the weakest private payroll growth in over two years, sentiment leaned defensive.

“There’s still plenty of upside for gold,” said Daniel Pavilonis of RJO Futures, pointing to tensions across Russia, Ukraine, Iran, and China. He added that while momentum may be slowing, demand for gold during uncertainty remains firm.

Technical Setup: Gold Eyes Fib Support at $3,364

After bottoming at $3,271 on May 30, gold staged an impressive rally, peaking near resistance at $3,393—just shy of recent highs. The move retraced back to $3,364, which aligns with the 23.6% Fibonacci level and a rising trendline drawn from the May lows.

Key technical observations:

MACD histogram has flipped red; momentum is fading
A spinning top followed by a potential evening star signals indecision
Price is hovering just above the 50-period EMA at $3,350

While the uptrend remains intact, a decisive close below the trendline could invite further downside toward $3,332 or $3,317 (38.2% and 61.8% Fib retracements).

Trade Outlook: Bulls Need a Bounce at Support

With markets on edge ahead of Friday’s U.S. payrolls report, gold’s next move hinges on whether it can hold the $3,350–$3,364 zone. This area is both technically significant and psychologically important for maintaining bullish momentum.

GOLD Price Chart - Source: Tradingview — GOLD Price Chart – Source: Tradingview

Trade Setup:

Bullish scenario: A bounce from the trendline with a bullish engulfing or hammer candle could push price back to $3,393 or higher
Bearish breakdown: A close below $3,350 may open the door to $3,317 or even $3,297

Gold thrives in low-interest-rate environments and times of political instability. As macro pressures mount—from China-U.S. tensions to faltering U.S. growth—gold remains a barometer for uncertainty, with $3,400 now acting as the key psychological level to watch.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.