Gold Price Forecast: $3,375 in Sight as U.S.-China Tensions Boost Demand

Gold rose on Wednesday as trade uncertainty and inflation concerns persisted. Despite both the US and China confirming...

Written by: Arslan Butt • Wednesday, June 11, 2025 • 2 min read

• Last updated: Wednesday, June 11, 2025

Quick overview

Gold prices rose due to ongoing trade uncertainty and inflation concerns, despite a new trade cooperation framework between the US and China.
Analysts remain skeptical about the trade agreement's impact until it receives official approval from both President Trump and President Xi.
Inflation fears and delayed Fed rate cuts are contributing to gold's appeal as a safe-haven asset amid geopolitical risks.
Technically, gold is showing bullish momentum, with potential targets of $3,375 and $3,405 if it breaks above $3,349.

Gold rose on Wednesday as trade uncertainty and inflation concerns persisted. Despite both the US and China confirming a new framework to revive trade cooperation, markets remained cautious. Gold, a safe-haven, benefited as investors prepared for potential volatility in the coming days.

US Commerce Secretary Howard Lutnick said a proposal would be presented to President Trump while China’s delegation must wait for President Xi’s approval. Until that political green light is given, traders are treating the agreement as speculative at best. News that China would lift rare earth export restrictions brought some relief but not enough to offset broader trade disagreements.

Analysts are sceptical. “We know there’s a framework but until Trump or Xi officially signs off, markets will stay nervous – and that’s lifting gold,” said Matt Simpson, senior analyst at City Index.

Inflation & Fed Outlook Add Bullish Pressure

Now it’s inflation. The US Consumer Price Index (CPI) report at 1230 GMT will guide the Fed’s next move. With inflation still sticky and tariffs back in play, economists see no rate cut this summer.

The World Bank added to the gloom, cutting its 2025 global growth forecast to 2.3%, citing ongoing trade frictions and rising policy uncertainty as major risks. This mix of weak growth and lingering inflation – stagflation – has historically sent investors to gold.

Key drivers behind gold’s current strength:

Safe-haven demand from geopolitical risk
Inflation fears from tariffs
Delayed Fed rate cuts and dovish policy sentiment

Technical Setup: Gold Heads for $3,375

From a technical perspective, gold (XAU/USD) is bouncing off strong trendline support at $3,315, forming a base. After dipping below its 50-EMA ($3,333), prices have rebounded, supported by bullish candles and a positive MACD crossover, suggesting momentum is building.

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

Price action shows a higher-low structure, a doji candle at support followed by green candles – a morning star reversal. A close above $3,349 would open up $3,375, with $3,405 next.But watch for false breaks. A pullback below $3,315 could see a retest of $3,271.

Trade Setup:

Entry: Above $3,349
Stop-loss: Below $3,315 (trendline)
Target: $3,375 (short-term), $3,405 (extended)
Risk: Moderate, confirmed by MACD and candles

Summary

Gold is bullish short-term as macro uncertainty, inflation risk and technicals align. A confirmed break could see more upside but stay nimble as US inflation data and geopolitical signals play out in real time.

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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.