Gold Price Forecast: Dollar Dips, Gold Pops—$3,500 in Sight?

Gold (XAU/USD) has now gone up for three days in a row, hitting $3,333 and a new one-week high. The dollar index (DXY) fell 0.6% and gold is looking more attractive to global buyers. With Wall Street pulling back and bond yields up, investors are fleeing to non-yielding assets as macro risk is high.

The debate around President Trump’s tax bill has brought back fears of a ballooning fiscal deficit and US assets are getting hit. As market strategist Daniel Pavilonis said: “We’re in a holding pattern, waiting for clarity on trade and fiscal direction.”

While the US-China trade war is cooling down for now, a Reuters survey shows economists still see the US economy as fragile.

Rising Tensions, Strong Technicals Support Bullish Bias

Gold’s safe-haven role is being reinforced by geopolitical tensions. CNN is reporting new intelligence that Israel may strike Iranian nuclear sites, global implications are high. Historically this kind of developments increase demand for gold as a geopolitical hedge.

Meanwhile ANZ is expecting the recent dip to attract investment demand, “persistent macroeconomic and political instability” is supporting the bullish momentum in gold.

• Dollar index down 0.6%

• Wall Street is down, bond yields up

• Record high: $3,500.05 (last month)

• ANZ: “Dip will attract investment demand”

Gold Technical Breakout Sets Up for Higher Targets

From a charting perspective gold has broken out above the descending channel that contained the price since early May. The move was confirmed by a bullish engulfing candle and higher lows, the 50-EMA ($3,274) is now the dynamic support.

MACD is bullish and price has reclaimed $3,290 and $3,320—both former resistance zones—now become near term support.

Key Levels:

• Immediate resistance: $3,358

• Next upside targets: $3,401 and $3,436

• Support: $3,320 and $3,290

• Risk invalidation: Below the ascending trendline near $3,274

Newbies buy above $3,358 or on retest of $3,320-$3,290 if it holds.