Gold Price Forecast: Renewed Momentum in XAU Amid Tariffs, USD Weakness and Geopolitical Risk
Gold has pushed back above $5,000 as renewed geopolitical tensions and U.S. dollar weakness revive safe-haven demand following one of the...
Quick overview
- Gold has surpassed $5,000 again due to renewed safe-haven demand driven by geopolitical tensions and U.S. dollar weakness.
- After a dramatic surge to nearly $6,000, gold experienced a sharp 26% decline, highlighting the volatility in precious metals trading.
- The recent correction saw gold break below key moving averages, but strong buying at the $4,400 support level has triggered a rebound.
- Physical demand for gold remains robust, particularly in India and China, providing structural support amid market fluctuations.
Live GOLD Chart
Gold has pushed back above $5,000 as renewed geopolitical tensions and U.S. dollar weakness revive safe-haven demand following one of the most volatile periods in its history.
A Historic Surge — Then a Violent Reset
The past two months have delivered one of the most dramatic chapters in modern precious metals trading. Gold surged through the psychological $5,000 level for the first time ever and accelerated toward an intraday high near $5,998. The rally was driven by escalating geopolitical tensions, aggressive speculative positioning, and expectations that global central banks might soon pivot toward more accommodative monetary policy.
Momentum buying intensified as traders chased breakout levels, reinforcing the upward spiral. However, the euphoric advance proved fragile. Within hours of peaking, gold reversed sharply, plunging below $4,400 and erasing weeks of gains in a matter of days. The 26% drawdown stunned futures traders, options participants, and ETF investors alike.
The scale and speed of the decline triggered widespread deleveraging. What had initially been a momentum-driven surge quickly transformed into a forced liquidation event, highlighting how stretched positioning had become.
Tariffs, Geopolitics and Dollar Weakness
Fresh catalysts emerged last week. The U.S. Supreme Court ruled against certain country-specific tariffs, but President Donald Trump subsequently announced a 15% universal global tariff over the weekend.
The tariff reshuffle reignited trade uncertainty and contributed to renewed pressure on the U.S. dollar over the past two trading sessions. A weaker dollar typically supports gold by making it more attractive to international buyers and reducing currency headwinds.
At the same time, rising U.S.–Iran tensions have reintroduced a geopolitical risk premium across global markets. Investors seeking stability have rotated back into traditional safe-haven assets. As trading opened Monday, February 22, gold was already climbing, benefiting from both dollar softness and heightened geopolitical concerns.
The combination of macro uncertainty and currency weakness has helped gold regain the $5,000 level, signaling renewed upward momentum.
Technical Damage — But a Crucial Hold
Technically, the correction was severe. Gold broke decisively below its 20-day simple moving average, ending a streak of consistent trend support.
Attention quickly shifted to the 20 week-day moving average near $4,400. Crucially, that level held. Buyers emerged aggressively at that support zone, halting the decline and triggering a strong rebound.
Gold Chart Weekly – MAs Continue to Support on Pullbacks
The recovery above $5,000 carries psychological importance. Reclaiming such a major round-number threshold often stabilizes sentiment, especially after a period of forced liquidation. While volatility remains elevated, the ability to defend longer-term trend support suggests that structural buyers remain active.
The market now appears to be transitioning from panic-driven liquidation toward consolidation.
Earnings and Broader Market Sentiment
While macro factors dominate precious metals pricing, equity market sentiment also plays a role. This week’s earnings releases from major companies such as NVIDIA, Dell Technologies, HSBC, and Salesforce may influence broader risk appetite.
If corporate results reinforce economic resilience, gold’s advance could moderate as investors rotate toward risk assets. Conversely, signs of slowing growth or cautious corporate guidance could further bolster defensive positioning.
For now, policy uncertainty remains elevated, and gold’s structure suggests improving longer-term momentum despite recent turbulence.
Physical Demand Anchors the Market
Beyond speculative flows, physical demand continues to provide structural support.
In India, gold premiums have climbed to multi-year highs ahead of the federal budget, fueled by expectations of potential import duty adjustments. In China, buying activity increased ahead of the Lunar New Year, with both jewelry and investment demand strengthening.
While some investors used the rally toward $6,000 to liquidate older holdings, fresh buying has emerged at lower price levels. This steady physical bid acts as a stabilizing force during periods of financial volatility.
The resilience of physical markets contrasts with the rapid swings in futures trading, underscoring the depth of underlying demand.
Conclusion: Gold’s recent journey—from historic highs near $6,000 to a swift 26% correction and back above $5,000—illustrates the extreme volatility shaping today’s markets. Yet beneath the turbulence, safe-haven demand, dollar weakness, and resilient physical buying are rebuilding momentum.
While volatility is likely to persist, the broader backdrop of geopolitical risk and trade uncertainty suggests that gold’s longer-term bullish foundation remains intact.
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